The Little Book of Cryptocurrency 

THE TRUTH ABOUT THE U.S. ECONOMY

Among Donald Trump supporters’ principal arguments for supporting him is their contention that the U.S. economy performed far better under Trump, versus how well it has performed under the  Biden administration.

I think it is important to note that conditions change from one two- and four-year period to the next, largely out of the control of whoever happens to be in the Oval Office. Trump inherited a strong economy and was riding high, then the Covid-19 pandemic hit, and all economic factors were reset. The supply chain, that is everything to a demand and supply economy, was broken on a global level, and so Trump saw his numbers go kaput.

Biden came in to office, in part, to restore an economy that had been broken by the global pandemic. It was also one recovering from historic Trump tax cuts for the wealthy, and an incredible increase in deficit spending. Biden has overseen a post-pandemic economy, and comparing Trump’s four years with Biden’s is comparing apples and oranges. That said, here is how it looks.

Still, even if the data comparisons can’t be viewed as exactly analogous, they reveal some things important to the final five weeks of this U.S. election season. Here are six factors that economists consider in judging the wealth of an economy, Trump and Biden compared.

GROSS DOMESTIC PRODUCT (GDP) is virtually the same under both Presidents. In fact, U.S GDP has stayed the same – around 2.2 percent annual growth – since 2000.

UNEMPLOYMENT averaged 5.01 percent under Trump, though the number is skewed by the pandemic shutdown of the economy later in his term. After ballooning during Covid, the unemployment rate under Biden has fallen to 4.1 percent, evidence of a soft landing from the economic disruptions of the pandemic.

The INFLATION rate under Trump was a low 1.9 percent, but “When the COVID-19 pandemic hit in 2020, bringing a brief but severe recession along with it, the Trump administration declared a state of emergency and passed stimulus measures such as the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act in an attempt to provide relief to individuals and businesses.” That stimulus package sparked an inflation in prices that carried into the Biden administration. “The average year-over-year inflation rate under President Joe Biden so far is 5.2%. Biden signed the American Rescue Plan Act in 2021, a $1.9 trillion stimulus package to help the country recover from COVID-19. In the wake of the COVID-19 pandemic recovery and after the Russian invasion of Ukraine in 2022 caused gas prices to soar, inflation rose to record levels not seen since the 1980s. Inflation peaked at 9.1% year-over-year in June 2022, the highest increase in 40 years. The Fed responded by raising interest rates 11 times since March 2022 in an attempt to cool the stubborn inflation.” (Quotes from Investipedia)

The CONSUMER CONFIDENCE INDEX (CCI) was extraordinarily high when Trump took office in 2020, and it got higher during his term in office, until the pandemic hit. CCI dipped dramatically, rose a bit when Biden was elected, but then was dragged to historic lows by dissatisfaction with the inflation rate.

Regarding INDUSTRIAL PRODUCTION, Trump came to office following an “industrial mini-recession in 2015 and 2016.” There were 7,000 manufacturing jobs lost, but they rebounded “bigly” under Trump, as the economy added 462,000 manufacturing jobs in his first two years. Then the pandemic hit, and 1.4 million manufacturing jobs were lost. About 770,000 of those manufacturing jobs had returned before Trump left office. But the combined job losses in 2019 and 2020 resulted in a net loss of 188,000 manufacturing jobs at the end of Trump’s presidency.

Biden experienced a similar pattern, growing the manufacturing base by 754,000 manufacturing jobs in his first two years, then experiencing a slowdown, until more than 173,000 people were employed in manufacturing than had been before the pandemic.

When Biden took office, manufacturing jobs continued to ride the post-pandemic recovery bump. In Biden’s first two years in office, there was a gain of 754,000 manufacturing jobs. By mid-2022, there were more people employed in manufacturing than before the pandemic, according to the BLS. “But as was the case under Trump, the rise in manufacturing jobs stalled in Biden’s third year in office. Between January 2023 and July 2024 — the latest data available — there has been a gain of just 11,000 manufacturing jobs.” And from January through July of this year, there has been a loss of 13,000 manufacturing jobs. (Quotes from factcheck.org)

PERSONAL INCOME AND SAVINGS  - the former has suffered under inflation, though during the pandemic that was a significant spike in savings eventuated by the inflation-feeding stimulus checks. Americans saved and then when the pandemic was deemed ended, we started buying stuff. The biggest beneficiaries were the restaurants, airlines, and hotels, but as all that pent-up energy was literally being spent, Americans were racking up big credit debt. From Vox.com/politics – “Americans are pulling from their now-depleted savings and amassing record-high debt on credit cards and other revolving plans in which consumers can repeatedly borrow money up to a set limit and repay in installments. Young adults in particular, many of whom are also struggling with high student loan debt, are increasingly falling behind on their credit card payments. This might be part of the reason many Americans still yearn for the economy of 2019, when they had more cash on hand and didn’t have to resort to putting purchases on a credit card.

BALANCE OF TRADE – we primarily think in terms of our balance of trade with China. Trump touts his negotiation acumen against archrival China, but (from Bloomberg.com) - “When new numbers come out Wednesday they are likely to show the US goods deficit with China in 2023 hit its lowest annual level since at least 2010 and did so while his rival Joe Biden was in the White House. As a percentage of GDP the story will likely be even more dramatic. At 1% of US GDP the deficit will be the lowest since 2003, shortly after China joined the World Trade Organization.”

As of this writing, the U.S. economy seems in good shape. The stock market is hitting record highs. Food prices are back to where they were in 2019. Posing the question of America's economic health to ChatGPT, the AI referenced poynter.org, pewresearch.org, bloomberg.com, nbcnews.com, and nytimes.com and came up with this summary of America's economic condition: "Economists have mixed views on the current state of the U.S. economy. On one hand, data shows strong indicators such as low unemployment, robust job creation, and a growing economy driven by consumer spending. However, public sentiment remains largely negative, with many Americans concerned about inflation and high interest rates. This disconnect is partly due to the lingering effects of the pandemic and the perception that prices are still too high. Additionally, opinions are highly polarized along partisan lines, with Democrats generally viewing the economy more positively than Republicans."