One of Donald Trump's final arguments during the election campaign was that he would bring America a new “golden age.” This week he announced that this Trump-driven golden age has already begun started.
This is fitting given that Trump has quickly eclipsed current President Joe Biden in setting expectations and even an agenda for America at home and abroad. It feels like the time has already begun for the second Trump administration.
So does the usual battle over who should get the credit — or blame — for the economy the next president inherits. This happens to a certain extent Every new presidentregardless of party and not just on the subject of the economy.
Ronald Reagan's vice president, George H. W. Bush, inherited his economy, but Bush's advisers quickly realized that he had also inherited an inevitable recession and a savings and loan crisis from the Gipper. In the final days of this year's election: Barack Obama complained that Trump had inherited his economic successes in 2017.
Trump now has every reason to appreciate the economy: it is doing surprisingly well.
This is not about trivializing the pain of many Americans or ignoring economic problems such as exploding debt, inflation and dislocation in some regions and industries. Even in the midst of a macroeconomic boom, people live in microeconomic conditions.
Yet the US economy is the envy of the world. Don't believe me: The cover of a special output The Economist in October described the American economy as “the envy of the world” and noted that the United States “has left other rich countries in the dust.” The Financial Times reached the same conclusion this month.
This is a stark contrast to the 1990s, when many expected Europe's economies to overtake our economies. In 2008, the European Union's economy was 10% larger than that of the United States. The time had come by 2022 23% smaller. The EU grew by 21% during this period, but the American economy grew by 72%.
Today the US economy accounts for about a quarter of global production. US stocks account for 65% of global stocks, while Japan, China and the UK combined make up just over 10%. If Great Britain were an American state, then would hardly displace Mississippi – our poorest country – measured in terms of gross domestic product per capita.
There are many reasons for this. Americans easy work Harder as citizens of other rich countries. Our productivity has exceeded In the Eurozone the ratio has been more than 3 to 1 since 2008. Our corporate culture is also different: We are the most entrepreneurial country in the Eurozone Worldand we do not view business failure as a cause for shame, but rather as useful experience for the next attempt. America is also better at assimilating immigrants than most countries, and the immigrants we attract generally work very hard.
I could go on. The point is that over the last 30 years we have had different presidents with very different policies and even more different rhetoric. But U.S. economic trends — with the usual dips and spikes — have been largely positive during all of these presidencies.
As Brian Riedl of the Manhattan Institute put it National Affairs“The idea that there is a simple partisan pattern to the health of the economy is an extension of the over-politicization of our understanding of contemporary American life.”
Recent dissatisfaction with the economy, fueled by inflation, fueled the idea that America was doing particularly badly under Biden. Again, we live in microeconomies, so it's understandable that many people had this view. But we still did better than pretty much everyone else.
Trump's focus on the economic disadvantages was typical of a presidential challenger and quite justified. But he wrongly claimed that our competitors ate our lunch.
None of this is to say that presidents and their economic policies don't matter. It's just that they aren't as important as presidents and their supporters claim.