If it’s true that President Obama’s economy was anemic because he “inherited the worst recession since World War II” from former President George W Bush, the so-called “Great Recession,” how do you explain the fact that Trump has presided over three consecutive quarters of economic growth of 3 percent or more for the first time in over 12 years? After all, he truly inherited the worst economy since World War II from Obama.
Why didn’t Obama see economic growth like this? Is it possible Obama’s economy had contempt for America’s first black president? As ridiculous as that question sounds, I’ve had Democratic friends of mine tell me that they believed whites and Republicans conspired together to spend and invest less of their money while Obama was in office just to make him look bad. Wow! What they don’t understand is that Trump’s economic success and the record highs we’re seeing in the stock market, despite having no major legislative victories thus far, can be attributed to several things:
1) Consumer confidence has been restored in the market place because Trump is pro-business; 2) the perceived unfinished fight against Obamacare has made business owners cautiously optimistic; 3) rolling back EPA regulations that have hurt the energy industry; and 4) an optimistic belief that Republicans will cut the corporate tax rates, ultimately allowing more businesses to hire – jobs, jobs, jobs!
Therefore, the markets weren’t unfavorable toward Obama because he was black, but because he was anti-business. I’ll explain this in further detail shortly. First, let’s establish how historically awful Obama’s economy was.
In his column published last year, entitled “Obama’s Historically Bad Economy,” Jeffrey Anderson of the Hudson Institute wrote, “Adjusted for inflation, average yearly GDP (Gross Domestic Product) growth under President Obama has been less than half of what it was under President Jimmy Carter, 1.5 percent to 3.3 percent.” The definition of GDP is the total value of goods and services produced in a country in one fiscal year.
Since World War II, the average annual GDP growth rate has averaged 2.9 percent. The worst year recorded in the post-WWII era was 1947, when GDP declined to -11.6 percent. From 1947 to present, average annual GDP growth has been 3.2 percent. However, it’s important to note that not all presidents contributed their, shall we say, “fair share.”
This is where Obama’s economy comes in to play. He ranks dead last for the worst economy amongst every president post-WWII. LBJ topped the chart, overseeing annual GDP growth as high as 5.3 percent, whereas Obama’s low was 1.5 percent. To put that into perspective, here’s the presidential ranking according to the Bureau of Economic Analysis (BEA):
- Johnson 5.3 percent, Kennedy 4.3 percent, Clinton 3.9 percent, Reagan 3.5 percent, Carter 3.3 percent, Eisenhower 3.0 percent, (post-WWII average of 2.9 percent) Nixon 2.8 percent, Ford 2.6 percent, Bush 41 2.3 percent, Bush 43 2.1 percent, Truman 1.7 percent, Obama 1.5 percent.
I can hear the lefties screaming now, “Carl, Obama inherited the worst economy since World War II!” Wrong! How about the economic disaster President Reagan inherited from President Carter? Furthermore, according to the Hudson Institute, one need only to examine the best economic year of a president to gauge how well the economy performed under his leadership.
For example, Harry Truman’s best year, 1950, saw an amazing 8.7 percent real GDP growth. His first couple of years in office however, 1946-47, brought his averages down. Likewise, second only to Truman, in 1984, President Reagan had his best year of 7.3 percent real GDP growth. Thus, the average “best year” amongst the post-war presidents has been an astonishing 5.6 percent! However, Obama’s best year bottoms out the chart at an abysmal 2.6 percent in 2015.
Although presidents don’t have sole legislative power to impact the economy, they can positively or negatively influence it by their words and actions.
Do you remember in November of 2008 when the CEOs of the big three automakers, Ford, Chrysler and GM, flew into the nation’s capital to beg for $25 billion in bailouts? They were rightfully scolded for flying into town on their luxurious corporate jets. The optics were bad, and it was obvious they were out of touch with middle-class Americans.
In a subsequent interview with Barbara Walters, then President-elect Obama called the automakers CEOs “tone deaf.” In that same interview, he demonized CEOs in general, referring to them as “captains of industry” that were “pulling down hundred-million-dollar bonuses on Wall Street, and taking enormous risks with other people’s money, that indicates a sense that you don’t have any perspective on what’s happening to ordinary Americans.” Can you say class warfare?
Obama continued his hostility toward job creators upon entering office. He placed a $500,000 cap on executives that benefited from bailouts. Additionally, his incendiary comments inspired protesters to camp outside the homes of bank executives in New York and Connecticut. Job creators everywhere took notice. They reacted accordingly – layoffs, hiring freezes, less investment, etc. Then, Obamacare was passed, forcing many small-business owners to cut their full-time employees to part-time just to keep their doors open.
Trump, on the other hand, talked up the economy. He praised job creators. He promised middle-class Americans tax cuts so they could keep more of their hard-earned money. His administration slashed burdensome regulations immediately – rolling back 23 environmental regulations in his first 100 days, sparking a needed comeback in coal country. He continues to pursue the eradication of Obamacare. No matter where you are on the political spectrum, businesses owners and consumers are reacting to a president that’s pro-business. It’s that simple.
Admittedly, confidence in the market alone is not sustainable. This makes the GOP’s attempt to reform the tax code imperative. Nonetheless, I wouldn’t be surprised if President Trump hit four consecutive quarters of GDP growth above 3 percent. If he achieves this, it won’t be because he’s white, but because he encourages success, unlike Obama who vilified it.