The left is quickly running out of excuses for why President Trump’s economic policies have caused a boom — rather than the bust they predicted with such great certainty.
Last year, when the U.S. economy began to percolate with faster growth, the media and other Trump haters argued that this simply reflected a pick up in worldwide growth. Mr. Trump was riding the wave of what economists were calling “synchronized growth.”
But now what do they have to say? The latest indicators are that as a front page in The Wall Street Journal reported on June 4: “Global Growth Loses Steam.” Japan’s growth rate is estimated to have slowed to slightly negative in the first quarter. The European Union (EU) was at an anemic 0.4 percent. Global growth is expected to be much slower in 2018 than in 2017, according to the World Bank and the International Monetary Fund (IMF).
Then there is the outlier: The USA. Here at home growth is sizzling. Almost all economists now predict a growth rate of above 4 percent for the second quarter of 2018 and Dan Clifton of Strategas, one of the best forecasters of recent times, believes we may hit 5 percent later this year. He points to the surge of investment capital flowing into the United States and the increased business spending points to several more quarters of this torrid growth, while the rest of the world treads water.
So much for synchronized swimming.
Then there is the argument that Trump policies have nothing to do with the American prosperity burst. Politico’s economics reporter recently published a column insisting that the “GOP tax cut is not why economy is booming.” He contemptuously adds that “economists are rolling their eyes at candidates’ claims” that Trump policies inspired faster growth.
Which economists? It turns out this is the same gang that was dead wrong about the growth happening in the first place. The argument here is that the tax cuts are just kicking in, so they can’t account for the increased economic activity. This ignores the anticipatory effect of the tax bill’s lower rates on their profits and investment — of the cannon in 2018.
Whatever the cause, it s undeniable that America has a new spring in its step. After a decade of malaise the American economy is the envy of the world today. A new report by the Switzerland-based Competitiveness Center reports:
“The U.S. dethroned Hong Kong to retake first place among the world’s most competitive economies, thanks to faster economic growth and a supportive atmosphere for scientific and technological innovation.”
But the ultimate judge of all this is the American people — the voters. They know something big is going on here.
In the years before the election of 2016 about 3 of 10 voters described the economy as good or great. This year 7 in 10 do. That surge in optimism began immediately after Mr. Trump’s election and hasn’t subsided. (See chart.) The same trend is true for small and manufacturing business confidence. Up, up and away.
Perhaps the best news of all is to think that maybe Mr. Trump’s critics are right and that the economic thrust from the tax cut hasn’t even kicked in yet. If that’s true, then buckle up, because we’re in for a heck of a ride.
• Stephen Moore is a columnist for The Washington Times and a senior fellow at the Heritage Foundation.
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