The Myth Behind The Trump Administration's Unprecedented Economic Performance
The other day I turned on my television to get the latest update on the status of the coronavirus pandemic in the United States from our beloved President. Much to my surprise, the President was not talking about the coronavirus, but instead, he was talking about how well the stock market was doing.
In his daily coronavirus pandemic update the President, ignoring the fact that the United States stands out as the worst-performing industrialized nation in terms of handling the coronavirus pandemic, was instead touting how many times the different major stock indices had broken new highs during his Presidency, including the fact that the NASDAQ-100 was currently at unprecedented levels, and the Dow and S&P 500 were likely to follow shortly.
As a senior citizen, who depends somewhat on the income derived from his investments, I will say that I am interested in how the stock market performs, but in all truth, these days I am much more concerned about the coronavirus pandemic for both me and my wife’s health. So, to say the least, I was disappointed with the President’s seemingly misguided briefing.
As a fellow-alumni (Wharton MBA 1983) to the President’s esteemed alma mater, I thought it might be a good time to go to the data and show my followers what I have known all along. The supposed unprecedented economic performance of the United States during that Trump Presidency is a myth. And a big MYTH at that.
All of us know that our new leader stretches the truth from time to time, but there is no time better than now to debunk the myth of his Presidency’s strong economic performance. Let’s look at the data.
The following table shows the historical numbers for the three major U.S. stock indices at three different time periods: (1) the beginning of the Obama Administration; (2) the ending of the Obama Administration and the beginning of the Trump Administration; and (3) the current numbers as of August 12, 2020. The period between the first two sets of numbers covers 2,922 days. The period between the last two sets of numbers covers 1,399 days.
Historical Performance of Major Stock Indices
Stock Index |
Jan 1, 2009 |
Jan 1, 2017 |
2,922 Days Avg Daily Increase |
Aug 12, 2020 |
1,399 Days Avg Daily Increase |
DOW |
7,955 |
19,792 |
0.051% |
27,851 |
0.031% |
S&P 500 |
823 |
2,275 |
0.060% |
3,352 |
0.036% |
NASDAQ 100 |
1,179 |
5,113 |
0.114% |
10,962 |
0.095% |
Do you see anything surprising here? You should if you have been buying into the Trump Myth.
The average daily increase throughout the eight-year Obama Presidency is greater than the average daily increase during the Trump Presidency in Every Major Stock Index. Not only are the Obama increases greater, they are substantially greater, and they cover a longer time period.
Want to look at something else? O.K., let’s look at historical unemployment numbers. The following table shows the unemployment rates for the same time periods shown above, covering both the Obama and Trump Presidencies.
Historical Unemployment Rates
Jan 1, 2009 |
Jan 1, 2017 |
Aug 1, 2020 |
7.3% |
5.0% |
10.2% |
From the beginning of the Obama period to its end, the unemployment rate dropped from 7.3% to 5.0%. During the Trump Presidency unemployment has gone from 5.0% to 10.2%.
Ah yes, but Jim you are cherry-picking the numbers. Trump cannot be blamed for the current 10.2% unemployment rate—that is all due to the coronavirus pandemic.
Hogwash! If I was cherry-picking the numbers, I would have shown that ninth months into the Obama Administration, as part of the 2008 financial crisis, the unemployment rate was 10.0%, not the 7.3% shown. And as far as our current unemployment rate, I ask the reader this. What do you think the current unemployment rate in the United States would be if we had a flat-line coronavirus daily death count of around 50 (comparable to the per capita rates of other industrialized nations) in lieu of the current 1000 daily death rate? The current U.S. unemployment rate is much, much higher than it would have been if we had managed the coronavirus pandemic like the other industrialized nations.
Still not convinced about the Trump Economic Myth? Then let’s look at the U.S. Gross Domestic Product (GDP) numbers like we looked at the above numbers. After all, GDP is about as good of a measure of economic performance as you can get.
Historical Gross Domestic Price (GDP $Billions)
Jan 1, 2009 |
Jan 1, 2017 |
Aug 1, 2020 |
$14,560 |
$19,032 |
$19,409 |
During the Obama Administration, the GDP of the United States grew at an average rate of $139.8 Billion each quarter for the 32-quarter period of that Administration. So far into the Trump Administration (14-quarters), the average rate of increase of the GDP of the United States is $26.9 Billion.
I think that should be enough to debunk the Myth about the “unprecedented economic performance” of the United States during the Trump Presidency. Even so, I am sure some of the Trump cult will still want to hang on to their cult leader’s less than half-truths about his unprecedented performance.
But just in case some cult members want to explore for themselves the real truth. Here are the sources for my data: Bloomberg Financials (stock indices); Bureau of Labor and Statistics (unemployment rate); and Bureau of Economic Analysis (GDP).
Disclosure: No positions.
Don't blame me, I did not vote for the guy! And the ballot still needs that one more choice: "None of the Above."
What growth may be seen has been due to the inflationary actions of the federal bank, increasing the money supply to help wall street.
It is possible that we are doomed. It may be that "the light seen at the end of the tunnel" is actually a fast freight headed our way.