According to an economist who teaches at Stony Brook University, Donald Trump's claims that, before the COVID-19 pandemic came along, his policies were responsible for a U.S. economic boom are not only wrong, but the president's endeavors may actually have been a drag on economic growth.
In his column for Bloomberg, Noah Smith, who got his Ph.D. in economics at the University of Michigan, claimed that the president presided over a boom that was not of his making.
Noting that going into the election the only thing the president has had to boast about was the economy that humming along before the coronavirus pandemic led to close to 50 million unemployed and forced business closures, Smith said the president deserves little to no credit for low unemployment and a stock market gains.
As he wrote, Trump previously "presided" over a strong economy -- but had little effect on it.
"The key phrase here is 'presided over,' because Trump didn’t really do much more than that. If anything, those economic policies that he did manage to enact probably did more harm than good, he wrote before adding, "Wages for the median full-time worker began rising strongly during President Barack Obama’s second term, and the rise continued under Trump," with the caveat, "this likely wasn't a function of anything Trump did."
According to the economist, Trump hindered growth with his ill-advised trade war with China, making "things harder for U.S. manufacturers by raising the price of imported components," which consumers ended up paying more for.
Adding that Trump's tax cuts mainly concentrated more wealth among the rich, who failed to pump those savings back into the economy, he asked why the Trump boom myth persists.
"The only possible way is through human psychology -- what economists call animal spirits. If business people -- who tend to lean Republican -- felt greater confidence from having a Republican in the White House, that might have made them more willing to invest," he explained.
However, he notes, "Even this probably is giving Trump too much credit."
"The likeliest scenario is simply that he inherited a recovery from his predecessor, that this recovery lasted a long time because the economy was digging itself out of an unusually deep hole, and that Trump mildly hurt that recovery through bad trade policy," he suggested before adding that pundits and the public tend to give too much credit for the economy to presidents when they are multiple factors are at play.
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