Instead of being the promised supply-side boost to productivity and investment, the tax cut served only as a brief jolt of Keynesian sugar for the economy. It boosted consumption, not investment. That consumption created some extra jobs, but the job growth slowed again as the stimulus faded, forcing the Fed to cut rates again to keep it going.
Getting the unemployment rate down to 3.5% wasn’t Trump’s achievement or Obama’s–it was the work of the Fed, of Ben Bernanke, Janet Yellen, and Jerome Powell. Even more, it was the accomplishment of the American people, who went to work every day and paid down their debts every month. They painstakingly rebuilt a ravaged economy over 10 years, only to have the guy who just showed up in the corner office take all the credit.
Trump desperately needs to take credit for the economy, because he doesn’t have any other positive accomplishments to tout. He has to talk about an imaginary “great” economy to distract us from his failures, to make us forget the cemeteries and unemployment lines, and to make us forget that’ll we’ll need more than luck to rebuild our economy so it works for everyone.
-Rex Nutting; 415-439-6400; [email protected]
(END) Dow Jones Newswires
09-28-20 1536ET
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