Runaway economy

For more than two years, Democrats and their media friends have confidently insisted the U.S. economy under President Donald Trump (a) would crash and burn; or (b) benefits only the few; or (c) was fake; or, failing all of that, was just (d) the lucky beneficiary of policies put into place under Barack Obama.

None of these arguments is tenable today. Anyone seriously interested in defeating Trump at the polls next year should stop making them.

The very pleasant reality of the U.S. economy was neatly captured in the headline of Neil Irwin’s analysis last Friday in The New York Times: “The Economy That Wasn’t Supposed to Happen: Booming Jobs, Low Inflation.” Unemployment is at 3.6%, a 50-year low. Job creation remains strong. Average hourly earnings are up 3.2% over last year. Inflation is 1.6%.

“After more than two years of the Trump administration, warnings that trade wars and erratic management style would throw the economy off course have proved wrong so far,” Irwin writes, “and tax cuts and deregulation are most likely part of the reason for the strong growth rates in 2018 and the beginning of 2019.”

Irwin allows that the economy could slow as the effects of the tax cuts fade. That’s always possible. But for now, the economy is in even better shape than the headline data suggest.

There have been more job openings than job seekers for 13 straight months. Workers without college degrees have seen significant gains in their wages. Productivity growth is up, unusual at this point in an almost decade-long expansion. There are no obvious bubbles in tech, real estate or other industries, and the Dow has mostly recovered from last year’s swoon.

And as an astute friend pointed out to me recently, Trump’s scary tweets even seem to have the effect of tempering market exuberance, acting as a kind of check in lieu of interest-rate hikes.

How should Democrats deal with the good news? Denial can’t work forever.

In 2017, denial took the form of emphasizing the issue of wage stagnation — but then wages stopped stagnating. In 2018 the critics said the tax bill would provide nothing more than a sugar high for the economy, and yet the recovery has, if anything, accelerated. Earlier this year, we had “the incredible shrinking Trump boom” — until the data showed no shrinkage.

Now the Often-Wrong-But-Never-Humbled Department tells us the boom is really just a big fat Keynesian stimulus incurred at the cost of our ballooning budget deficits. Perhaps it is, but then how does the department explain the last 30 months of its doom-saying?

Eventually, of course, a recession will come. Recessions always do. The problem for Democrats is that there’s no guarantee that it will come before the election. In the meantime, they’ve left a trail of bad forecasts that make them look silly and out-of-touch — which the Trump campaign will gleefully use against them.

More importantly, it creates the perception that Democrats (at least those of the more ideological variety) are secretly hoping for a downturn, both to help their electoral chances and vindicate their own past predictions.

It’s unbecoming. It suggests a party led by people for whom questions of job creation and growth will always be abstractions, since their own jobs and prospects will always be safe. It’s what The Wall Street Journal‘s Peggy Noonan shrewdly described in 2016 as the “protected class” — the people who make policies but never really have to live with the consequences.

In 2016, Hillary Clinton was the candidate of the protected class, Trump of the unprotected. If Democrats decide to run against prosperity — either by pretending it isn’t really happening or that it doesn’t matter — it will only send a message to the voters they lost last time that the party still doesn’t get it.

They’ll lose again.

There’s a reason Trump’s approval rating is now at 46% — the highest of his presidency, according to Gallup — despite all the Democratic thundering about William Barr’s testimony to Congress and the renewed talk of impeachment. Wittingly or not, Trump is delivering on the core promise of the presidency.

There’s also a reason that Joe Biden has taken a commanding early lead in the race for the Democratic nomination. His central theme is that he’s a regular guy who will restore regular order to Washington and regular behavior in the White House without mucking things up through a grand redesign of American capitalism. It isn’t clear that Biden will be able to get through the primary without putting both feet in his mouth and falling flat on his face. But that’s the right theory of the race.

Democrats need a candidate who gets this. They need someone who will work to enlarge our prosperity, not redistribute it. They need someone who can communicate and deliver, without embarrassing and frightening normal people the way Trump does.

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Bret Stephens is a columnist for the New York Times.

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