Is Donald Trump’s Economic Legacy Positive for the American Economy?
The economic impact of Donald Trump's presidency has been widely debated, with many questioning the extent to which his policies have positively affected the American economy. While his macroeconomic record was criticized by numerous economists, let's delve into the details of his policies and their actual effects.
No Positive Impact
Contrary to the notion that President Trump introduced groundbreaking policies that positively impacted the economy, the reality is stark. There is ashy;scarcity of evidence that showcases impactful or positive economic policies during his tenure. One can hardly point to a single policy that has had a lasting and beneficial effect on the American economy.
Corporations and Wealth Taxes
Although Trump reduced taxes on corporations and wealthy individuals, this reduction is often attributed to the long-standing Republican agenda, making it challenging to attribute the credit solely to Trump. He signed these tax cuts, but it’s important to examine the broader implications.
Corporate tax cuts had a temporary positive effect on the stock market due to increased corporate earnings. Companies invested their tax windfall into share buybacks, which led to a rise in earnings per share (EPS). However, these gains were not driven by significant product innovation or productivity enhancements. Instead, they were the result of low-level financial maneuvers that should not be celebrated as true economic growth.
The Ethical and Economic Issues
Reducing corporate taxes to such an extent that the government effectively gave corporations access to free funds through borrowed money raises ethical concerns. By advancing this approach, the government unknowingly enabled unchecked corporate spending, which could have gone towards other vital improvements or upgrades. This has profound implications for future government financing in times of crisis, such as a pandemic. It leaves the government with a bloated deficit and national debt, making it difficult to assist citizens in need.
The Disconnect Between Stock Market and Economic Health
The argument that rising stock market gains indicate a healthy economy is flawed. Many Americans continue to struggle, with millions unemployed and wages stagnant. Nearly 30% cannot afford a $400 emergency expense without help, and over 12% cannot afford it at all. Additionally, 78% of the population cannot afford to miss two paychecks. These statistics paint a picture of a divided economic health where the wealthy are prospering while a significant portion of the population is living paycheck to paycheck. This disparity is not sustainable in the long term.
Tragic Economic Short-Term Decisions
Regarding the decision to “reopen the economy” in the early stages of the pandemic, it is evident that this action had severe and long-lasting consequences. Millions of Americans lost their jobs, and tens of thousands lost their lives. Overlooking the effectiveness of mitigating measures such as quarantine, masking, sanitization, and testing cost the Trump administration dearly, both in terms of lives and public trust. A more cautious approach, with the emphasis on public safety and health, could have maintained a healthier economy without the long-term repercussions.
Regulatory Reductions
Trump's goal to reduce regulations was well-intentioned, but the execution was inconsiderate and potentially harmful. Focusing solely on the number of regulations without considering their impact resulted in both outdated and outdated regulations being removed, impeding progress. Despite his desire for deregulation, many states and corporations refused to comply, setting the stage for a rollback of environmental and social progress.
While the focus on outdated regulations is a positive step, mandating the removal of two new regulations for every one enacted can lead to absurd outcomes. Additionally, the emphasis on minor details like toilet water flows and shower water flows is not a sustainable approach to regulatory reform.
In conclusion, while some of Trump's policies had short-term positive effects, the long-term economic legacy is largely damaging. The stock market gains were not reflective of genuine economic growth, and the approach to both healthcare during a pandemic and regulatory reductions overlooked the real needs of the American people.