Growth: Remember when everybody said that the “unexpectedly” strong economy under President Trump had nothing to do with his policies? He was just lucky because the global economy was booming, they said. Well, that attempt to dismiss the Trump boom just fell by the wayside.
Every three months, CNBC surveys its Global CFO Council to get their reading of the global economy. The council is comprised of Chief Financial Officers of the world’s largest 113 companies that combined are worth nearly $5 trillion.
The latest survey shows that these CFOs see only one economy in the world that is currently improving. The United States.
They rate every other nation or region one as either “stable” or “declining.” That includes the UK, the Euro Zone, Canada, Japan, China, Russia, Latin America, the Middle East, Africa.
The fact that the U.S. appears to be pulling away from the rest of the world hasn’t gone unnoticed, at least not in the White House. At a speech last week at the Economic Club of New York, Trump’s top economic adviser, Larry Kudlow, said “the U.S. is the hottest economy in the world today. We’re crushing it.”
But wait a minute.
For some time now, the “experts” have been telling us that the U.S. was just riding a global growth wave. The improved economy here had nothing to do with Trump’s deregulatory efforts, or his pro-growth tax cuts, or the sharp uptick in optimism once he got elected.
Trump, they said, deserved as much credit for the economy as a lottery winner does for picking the right set of numbers.
“American multinationals corporations are enjoying a rare moment of nearly universal worldwide growth,” wrote Derek Thompson in Atlantic at the end of last year. The article’s headline: “The Myth of the ‘Trump Miracle.'”
Around the same time, The Wall Street Journal’s Greg Ip wrote that “Mr. Trump should be giving thanks, not taking credit. The entire global economy is picking up steam.”
More recently, The New York Times’s Peter Baker dismissed Trump’s boasts about the economy by noting that “the nation’s economic fortunes (are) driven as well by interest rates, technological innovation and the health of the global economy — trends beyond the control of any president.”
Now it appears that the U.S. economy is accelerating, while the rest of the world is in neutral.
Of course, this is just one of the ways Trump’s critics have tried to explain away the current boom, or at least deny that Trump has anything to do with it.
For example, there’s been a rash of stories claiming that everything happening today is simply an extension of the economy under President Obama.
As we’ve noted in this space, the only way to make that claim is to entirely ignore Obama’s last year in office, when the economy, after years of historically sluggish growth, gave unmistakable signs of slowing down even more.
GDP growth was in decline in the last two quarters. The stock market had been flat for a year. The unemployment rate was stuck. Median family incomes were flat. The economy kept falling short of expectations.
Back then, the very same people now crediting Obama for today’s boom were telling the public that the country was in a “secular” period of slow growth.
Time magazine wrote in 2016 that “the economic problems the U.S. continues to face …. may well be permanent drags on the modern economy.”
CBS News said in late 2016 that continued slow growth is “leading many economists to worry that the country has entered a prolonged period where any expansion will be weaker than it has been in the past.”
Now, suddenly, unexpectedly, and impossibly (according to the experts), the economy has a renewed energy. Incomes are at record highs, unemployment is down. Rather than underperforming, as the economy did throughout Obama’s eight years in office, growth is beating expectations.
So, if the current boom isn’t the result of Obama’s policies (it isn’t), and the U.S. isn’t simply riding a global boom (it’s not), then what explains current growth levels.
Could be it be…..Trump?
Nah, must be something else. Maybe it’s time to consult the star charts.