Trump’s economic cheerleading faces a huge test

One of President Donald Trump's greatest strengths in his presidential campaign is his economic salesmanship: He has convinced a devoted share of Americans that his leadership has made the US economy bulletproof and markets would crash if he were defeated in November.

The president's ability to set the economic narrative is buoyed by an 11-year economic expansion, with rising wages and unemployment at a 50-year low. That strength presents a challenge for the Democrats hoping to unseat him in November — even though Trump's cheerleading is often overstated and parts of the economy are slowing, including manufacturing.

Donald Trump is banking on a strong economy as he seeks re-election.Credit:AP

That helps explain why Trump has played down economic damage from the coronavirus and dismissed the stock market plunge: They threaten to undermine the most effective story he tells about his presidency.

"The country is in great shape, the market is in great shape," Trump told reporters outside the White House on Tuesday, as stocks tumbled after the Federal Reserve's rate cut. The S&P 500 ended the day down about 2.8 per cent.

Trump has blamed any growth hiccups on external events, like the Democrats running for president, troubles at the aerospace giant Boeing and the Federal Reserve. He has praised consumers and the economy's strength, even as forecasters warn that the virus could dampen growth at least temporarily this year.

On Monday, Trump suggested on Twitter that House Democrats pass a one-year cut in payroll taxes, a form of fiscal stimulus often aimed at boosting consumer spending at times of economic weakness. Yet the president did not concede any economic trouble.

Trump has fallen short on a number of his economic promises.Credit:AP

But on several measures, the economy has fallen short of the president's promises. It grew 2.3 per cent last year, well below the forecasts of Trump's economic team, as the president's trade war chilled business investment. Economic growth in the first three years of President Barack Obama's second term was nearly identical to that of Trump's first three years. Median wage growth is no higher today than it was in October 2016, and it remains well below the levels of the late 1990s.

The Times survey showed Democrats were less optimistic about the economy and less willing to credit Trump for it than Republicans were. Confidence among independent voters has fallen to a level between that of Democrats and Republicans, but closer to Democrats', during Trump's term. (Optimism among independents surged in January, but came back to earth in February, according to the Times survey.)

Douglas Prasher, a Democratic voter,said he didn't buy claims that the economy was doing well — and he didn't think Trump deserved credit if it was. Prasher, 68, recently retired to Arizona from San Diego, which he said had become unaffordable because of sky-high housing costs. His new home state is cheaper, but he has still had to take on a part-time job to make ends meet. He carries hundreds of thousands of dollars in student loan debt from helping his daughters go to college.

"As far as I'm concerned, people are suffering," Prasher said. The supposedly strong economy, he said, "seems to only help the wealthy, which we're not in that category."

The New York Times

Source: Read Full Article