Much has been written about the increase in job creation during the first two years of the Trump administration. And many of these commentaries, particularly by conservatives, have focused on the role of tax cuts and deregulation. And they are correct as will be explained below. However, some suggest this would not have happened without Donald Trump at the economic policy helm.
Sorry, but when it comes to suggesting Trump has performed some kind of job creation miracle, they are dead wrong. Consider the following. Suppose the United States was a typical higher-end middle class household earning $122,000 per year (Pew Research). This family could probably meet its basic needs and enjoy one or two personal amenities, but could not be described as living on “easy street.” Now imagine they win the lottery and suddenly have an influx of unearned cash. At the same time, they “deregulate” their lifestyle by not buying insurance to cover their home, car or medical expenses. They do no maintenance such as repairing the deteriorating stairs leading to their front door. As long as the stocks in which they invested their lottery winnings did not crash. Or they had no catastrophic accidents or illness. Or they were not liable for someone’s injury on their property, they would be cradled in the lap of luxury. But you would hardly call them fiscal geniuses.
Yes, the United States is experiencing job growth. But just like the above example, that phenomenon is fueled on “unearned dollars,” i.e. the annual deficit and reduced business costs as a result of deregulation which puts the health and safety of workers and the general population at risk. And it makes sense UNTIL someone’s luck runs out. Just ask Boeing.
What would really qualify as genius would be to achieve exemplary job growth while, at the same time, staying within one’s budget and without putting the health and safety of constituents at risk. Impossible? No and there is objective evidence to the contrary. Contrast the following years during the Clinton and Trump presidencies.
1998
Federal SURPLUS/$69 billion
Jobs Created/3.04 million
1999
Federal SURPLUS/$129 billion
Jobs Created/3.18 million
2000
Federal SURPLUS/$236 billion
Jobs Created/1.98 million
2017
Federal DEFICIT/$665 billion
Jobs Created/2.2 million
2018
Federal DEFICIT/$779 billion
Jobs Created/2.3 million
That’s right. The last president to both balance the federal budget and promote environmental protection can also claim the greatest employment expansion in the nation’s history with a total increase of 23.62 million new jobs over eight years.
Unfortunately, there is no objective measure of the difference in health and safety regulations during these time periods. However there are subjective indicators that separate Bill Clinton and Donald Trump. For example, the overarching philosophy during the Clinton years was environmental protection and economic growth were not incompatible. In contrast, Trump supported increases in fossil fuel use, withdrew from the Paris Accords and overturned many environmental regulations. Likewise, the current administration has rolled back worker safety rules affecting mining, offshore drilling and meat processing. And now it proposes more self-regulation by businesses and their trade associations. Why not? It worked for the banking industry in 2008.
The bottom line? If you want to create jobs, any idiot can do it if he or she does not care about the costs or risks to health and safety. Even I could do it.
For what it’s worth.
Dr. ESP