Trump economy remains strong,
much to Democrats’ dismay
If the stock market is worried about the President Trump getting impeached it has a funny way of showing it: The Dow, the S&P and Nasdaq set new records Monday, buoyed by strong corporate earnings, a possible trade deal and the wide-spread belief among sophisticated investors that the US economy will continue to chug along handsomely.
Despite what you hear from doomsayers like the newly minted Dem front-runner Elizabeth Warren, the rising Trump economy is raising all boats, not just the fat cats on Wall Street. At least that’s what the people who have money in the game are saying, and their word counts a lot more than any leftist politician.
Of course, even in the best of times — and according to the data we are pretty close to them now with unemployment hovering at a 50-year-low of 3.6 percent — there are things to worry about. Trump and Chinese president Xi Jinping may not reach their long-coveted trade deal. Sluggish business investment (which declined in the last quarter by an annualized rate of 3 percent after a 1 percent decline) could get even more sluggish, sending the modest economic growth of 1.9 percent in the past quarter into the red.
Wages are growing better than the dog-days of the Obama presidency, but growth has tapered off recently (to 3 percent in October) suggesting employers aren’t that worried about a tightening labor market and they’re slowing the pace of new hires. Meanwhile, the impeachment hearings could batter and bruise Trump so much that even an economic arsonist like Elizabeth Warren could slip through the electoral cracks and become president despite her fantastical utopian ideas of handing free stuff to everyone except wealth creators, who of course, she will tax so much they will stop creating any wealth.
More likely is that the current economy — which is strong and with a little luck likely to get stronger — will make Trump formidable in 2020.
The US economy grew nearly 2 percent last quarter, powered largely by continued strength of consumer spending, which grew solidly by 2.9 percent. People don’t generally spend money unless they’re feeling pretty good about their economic future, and you need more than the top 1 percent feeling good to accrue consumer spending growth like we now have.
In other words, the rich may be getting richer in the Trump economy, but so are most others.
Again, look at the numbers. I can’t wait for Warren & Co., to explain black unemployment, which has remained at record lows for the past three months. Yes, more needs to be done; black unemployment rate is at 5.4 percent compared to the overall 3.6 percent rate, but only a fool would argue that these numbers (possibly the biggest economic achievement of the Trump presidency) aren’t heading in the right direction, which is why for all of Warren’s class-warfare posturing, she has steered clear of them.
Keep in mind all this progress on the economy has been taking place in the face of prolonged business uncertainly as Trump fights his trade war with China. The president maintains he has good reasons to take on China’s abusive trade practices — from the theft of intellectual property to the uneven playing field faced by US companies doing business in the mainland — and he might have a point.
But there was an economic consequence to the tit-for-tat tariffs China and the US has been imposing on each other. As Trump and Xi move closer to ending the hostilities, the headache of uncertainty will be at the minimum removed. If they reach a decent deal allowing the likes of Chinese telecom company Huawei to have access to US markets, while US companies can have the same access to Chinese consumers, the economic benefits from both countries will be enormous.
I don’t know about you, but to me, a trade deal seems a lot more important for the markets, the economy and Trump’s re-election chances than some impeachment vote. And the best minds on Wall Street appear to agree.