Chait stains: Boy, Obama really revved up the economy and now Trump is going to get credit…

Jobs report out this morning. Unemployment is down to 4.7% or something. Now, we had a warm winter and have cheap gas… so you account for that, then maybe after you can discern a ‘Trump effect’ that anticipates pro-business policy, and that gooses employment. Not like I’d actually give Trump credit for that, though.

Chait pooh-poohs the notion of the ‘slow growth Obama years’ and is concerned Trump is going to ride an economic boom on a keel Obama laid.

http://nymag.com/daily/intelligencer/2017/03/obamas-economy-didnt-elect-trump-but-it-might-reelect-him.html

I quibble with this. Thing is, to say Obama’s economic policy succeeded and is yet to bloom even more is to say Obama had an economic policy. One that say could be distinguished from status quo economics by some implementation of Democrat / progressive values.

There wasn’t anything like that.

He/they stewarded a recovery from the 2008 crisis… by backstopping the bad mortgage debt for the banks. Safe to say that probably would have happened under a Republican \ John McCain.

We had a stimulus package that kept govt spending steady amidst a precipitous revenue drop. Safe to say that probably would have happened under a Republican \ John McCain.

There were some tax hikes on high earners. Some tax cuts (I think I probably pay less than I would have under GWB tax rates, as a moderately affluent earner with dependents…). Nothing substantial. The Democrats pre-eminent platform plank of wealth inequality was not addressed at all.

The alternate history of what would have occurred under the GOP is probably that we would have rode it out with Hoover-ite thrift, let the bad debt and budget shortfalls hamstring whoever got stuck with them…. No, would not have happened. There was only one path, and it would have been the same one Obama took.

I’m painting a pretty deterministic picture here, but it’s not like it was all pre-ordained. Obama could have pursued some socialistic / populistic solutions, could have gone contrarian, could have gone counter-intuitive, but he didn’t. You get back to that notion of stewardship…. What they choose to do reflected a wisdom, and they deserve credit for not being too clever by half or crazy.

But it’s to say, it was all stuff that is within the 40 yard lines of American economic thought… and there is no Obama economic policy. I, and Chait for sure, can articulate all the ways Obama was different and progressive on climate and law and foreign policy and health ins…. Can’t be done with Obama domestic economic policy, there is nothing discernible. He let the fed run the economy in a status quo manner. This low-low rate regime has been in place since 9/11.

And that’s fine. Normative US economics work pretty well., and Trump wouldn’t be unwise to keep riding this wave / horse we’re on. If he did, and it worked, he’d deserve credit, that ambiguous presidential credit for a good economy. If he changes stuff in ways that constitute a reform, he’ll deserve credit or change for that.

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2 thoughts on “Chait stains: Boy, Obama really revved up the economy and now Trump is going to get credit…

  1. pm1956

    I sort of disagree with you, mainly because i think that you are assuming that the GOP would not have really done what it was advocating at the time. And I kind of, sort of, agree with that. What the GOP was advocating was what was really, actually, done in Europe (as you describe it, Hoover-ite thrift), and it was terrible for their economy. If the GOP was in power (McCain), would they have used a stimulus? would they have saved the auto industry? backstopped the banks? Hard to say. McCain certainly didn’t argue to do this during the campaign, and Bush II was sort of lax about a stimulus (didn’t get in the way of the Fed, but…).

    I agree with you that what Obama did was exactly within the 40 yard likes of historic US economic (Keynesian) policy, and it worked. I’d like to think that McCain would have done the same thing (it is, after all, common sense), but it was not what he was arguing for at the time, and it was not what the GOP argued for at the time. Maybe(probably) they were against it because Obama was for it. This would, of course, be simply another proof of the oppositional nature of the GOP with respect to Obama. They were perfectly happy to tank the economy and make all of us suffer inorder to score political points, and gain political power for themselves. But that simply seems to be the nature of the GOP.

    Reply

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