Coronavirus hysteria has brought the U.S. economy to the brink of another Great Recession, but Trump’s economic policies and trade wars had already put it on that path well before the so-called pandemic showed up.
One of the topics discussed in last week’s faux presidential debate was the economy. At one point in the discussion, Trump declared that “our country is coming back incredibly.”
Biden ripped Trump’s claim. “He is going to be the first president of the United States to leave office having fewer jobs in his administration than when he became president,” Biden said, adding that “You can’t fix the economy until you fix the COVID crisis.”
Trump disagreed. “We had the greatest economy in history,” he claimed, saying 10.4 million Americans have been rehired. “We closed it down and now we are reopening it and we’re doing record business.”
Trump’s claim of creating the “greatest economy in the history of America” has been one of the most overused talking points throughout his presidency. But the simple reality is his trade war and economic policies have been bad for business and labor, and they have created conditions that all but guarantee a recession.
In other words, Trump lied and the economy died.
The economic damage from Trump’s scatterbrained and directionless economic policies — specifically his “good and easy to win” trade war modeled after 1800s protectionism and the 1930s Smoot-Howley Tariff Act responsible for fueling the Great Depression — is indisputable.
The “tariffaxes” (tariffs are taxes — H/T Shannon Joy for the new word) Trump imposed on our trading partners were hitting the pocketbooks of American consumers to the tune of $1.4 billion a month at the end of 2018.
As 2019 neared its end, Trump doubled down on his trade war despite signs the economy was slowing down. U.S. manufacturing had contracted for four months straight through November 2019, and farms hurt by the trade war only managed to survive due to Trump’s bailout program that has cost more than double what Obama spent to bailout the auto industry during the Great Recession.
Additionally, a National Bureau of Economic Research paper released in January 2020 showed that Trump’s claim that China and other nations were paying the tariffs he levied on thousands of products since his trade war began was a lie. According to the report, approximately 100 percent of the costs fell directly on American firms and consumers.
Trump often brags about how his tax cuts and economic policies have created new jobs at “historic” levels — even though Obama had better numbers — but according to data released by the Labor Department in August 2019, those claims are rhetorical hot air.
Labor Department data showed that American employers had created 500,000 fewer jobs from January 2018 through March 2019 than initially estimated. Hiring averaged around 180,000 jobs per month, down from the 223,000 jobs initially estimated. When compared to 2017’s job creation average of 179,000 jobs per month, 2018 was essentially flat.
What about the coronavirus recession?
There’s plenty of evidence to show how tyrannical government-ordered shutdowns contributed to the current economic malaise, but Trump’s economy was already in trouble before coronavirus as a result of his economic policies and trade wars.
Trump claimed during the debate that 10.4 million rehired unemployed workers was proof that “our country is coming back incredibly,” but new data recently released by the Labor Department shows an unemployment picture much different from the one Trump is painting.
The Labor Department report shows us that 2.4 million people have been out of work for 27 weeks or more — the threshold it uses to define long-term joblessness — and an even bigger surge is on the way as nearly five million people are approaching long-term joblessness over the next two months. The report also showed that even as temporary layoffs were on the decline, permanent job losses are rising sharply.
These two problems — rising long-term unemployment and permanent job losses — are separate but intertwined, and they could foreshadow a period of long-term economic damage and financial pain for American families when taken together.
Historically speaking, the longer people are out of work, the harder it is for them to get back into the workforce. Put another way, companies still struggling to survive below capacity this far into the coronavirus economy are increasingly unlikely to ever recall their employees.
Trump was elected, in part, due to his track record of so-called business success, even though he’s had more business failures than successes — including four bankruptcies — while achieving the self-proclaimed status of “the king of debt.”
Despite Trump’s rhetorical hyperbole about the success of his trade war, the awesome economy he built, and the millions of jobs he’s created, the opposite is closer to the truth. His trade war is a failure, the economy is has been in decline for years, and millions of jobs are about to be lost forever.
In true “never let a crisis go to waste” fashion, Trump has used coronavirus as cover for the reality of his failed economic policies.
And for the fence-straddlers hoping that the chosen one will realize the error of his ways and reverse course in time to beat Joe Biden in November and end the recession, let me quote from Dante’s Inferno: “Abandon all hope, ye who enter here.”
David Leach is the owner of the Strident Conservative. He holds people of every political stripe accountable for their failure to uphold conservative values, and he promotes those values instead of political parties.