President Donald Trump is building his 2018 messaging around the thriving economy, even though economists say the current economic trends are the result of President Barack Obama’s policies.
In fact, one economist told Politico, Republicans are pulling off an economic scam that would have them screaming about “the end of the world” if Democrats tried the same.
Politico’s Ben White and Nancy Cook spoke to three high-ranking White House officials who confirmed that Trump plans on attempting to boost his dismal poll numbers by touting the success of the U.S. stock market and falling unemployment.
While this may be a canny political move, it’s built on a falsehood, said Ian Shepherdson, chief economist at Pantheon Macroeconomics — a nonpartisan firm dedicated to providing unbiased economic analysis.
“If it were me, I would certainly claim the credit,” said Shepherdson — who was rated by The Wall Street Journal in 2014 as the world’s most accurate economic forecaster. “But looking at it coldly and rationally, there is very little the administration can say at this point is really down to them in terms of the economy.”
And while Republican tax cuts may spur some growth in the short term, Shepherdson explained, that growth will inevitably be hobbled as rising deficits drive interest rates upward and slow down private investment.
“You are essentially paying for this growth with over $1 trillion of borrowed money,” said Shepherdson. “Had the other guys done this, you’d have claims that they were going to bring on the end of the world by tea time.”
Meanwhile, the U.S. economy continues to grow in much the same manner as it did under former President Barack Obama. In the first 11 months of the Obama administration, the Standard and Poor’s 500 rose 37 percent. Under Trump, the same index rose 24 percent. In all, the economic gains posted this year are equal to or slightly below the same indicators, which economists say are evidence that Obama’s policies are continuing to work.
“Despite the underlying similarities to Obama, the White House plans to brand the economy as Trump’s doing in 2018 and sell a message that the nation is actually performing much better now, even before any impact from the tax cut bill,” said Politico. “A key piece of the Trump argument will be that economic prospects are even stronger now after a wave of deregulation across federal agencies in 2017.”