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State of national economy good indeed

This editorial appeared in The Washington Post.

There is no denying that the state of the national economy is good indeed, though President Donald Trump, predictably, exaggerates how good. The broadest measures — gross domestic product growth, wages and labor force participation — all point in varying degrees in the right direction, with the most sensitive indicator, unemployment, at a 50-year low of 3.6%.

The laws of politics decree that incumbent presidents take the blame for negative economic conditions and the credit for positive ones. In that sense, Trump's posture, in an election year, is entirely conventional. But the true State of the Union after three years of this otherwise unconventional presidency cannot be measured so straightforwardly.

One question is whether Trump's policies deserve the credit he axiomatically takes for the economy. On that point, the answer is mixed at best: Economic growth under President Barack Obama after the Great Recession ended in 2009 averaged 2.2% annually, so Trump's 2.5% annual average is a modest improvement over what he inherited, partially attributable to Federal Reserve policy — and partially to the stimulus from the hundreds of billions of dollars in tax cuts Trump's policies created over the past two years.

At the same time, however, the Trump tariff wars with China, Canada, Mexico, South Korea, Japan and Europe (did we miss anyone?) generated countervailing uncertainty that slowed growth. Also, the tax cuts, heavily weighted toward businesses and the well-to-do, probably exacerbated after-tax income inequality, notwithstanding the wage increases among lower-income workers Trump touts as a "blue-collar boom."

More consequential is whether the current prosperity has been built on a sustainable basis. Again, the jury is out: Trump's corporate-tax-rate cut represents a structural change in favor of investment that even many Democrats advocated, albeit not to the degree Republicans have enacted. Nevertheless, productivity growth rates remain stubbornly sluggish, and Trump has failed to deliver on his promises of major new infrastructure spending, which might have enhanced the economy's growth capacity. The sheer growth of the labor force is another key factor in economic dynamism, but Trump's anti-immigration stance works against that, too.

Finally, even if the economy were performing as well as Trump says, and even if he deserved all the credit, this unsettling question would remain: At what price? The president, of course, has not only changed economic policy since 2017; he has tried to change the presidency — from a focal point of national unity to a bully pulpit for partisan and personal rancor, up to and including the search for foreign-dug dirt on a political rival for which he faces an impeachment trial in the Senate.

Trump overtly asserts his total innocence in all respects, even as he implicitly tempts Americans with a subtly different proposition: to accept his behavior, and his conscious efforts to divide the country, as somehow necessary trade-offs for prosperity. This is as false as it is Faustian; trust and consensus are essential ingredients of a modern, efficient economy, not to mention indispensable to a thriving, durable Union.


The Day editorial board meets regularly with political, business and community leaders and convenes weekly to formulate editorial viewpoints. It is composed of President and Publisher Tim Dwyer, Editorial Page Editor Paul Choiniere, Managing Editor Tim Cotter, Staff Writer Julia Bergman and retired deputy managing editor Lisa McGinley. However, only the publisher and editorial page editor are responsible for developing the editorial opinions. The board operates independently from the Day newsroom.


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