Guest contribution by “The European”: Debt, Poverty, Growth: A Review of Donald Trump’s Four Years
In his four years in the White House, Donald Trump has by no means achieved what he promised – but much more than his critics allow him. In his new book, “TheEuropean” editor Graw takes stock.
In Washington, Ansgar Graw saw Donald Trump during the election campaign and in the White House. The then WELT chief correspondent for the USA wrote a book about this in 2017, which he has now completely revised, expanded and updated. Starting today, “Trump Crazy the World” is available online or in stores.
The author, now editor of TheEuropean, is critical but fair with the president. He analyzes why the former real estate entrepreneur and TV entertainer was elected in 2016, what mistakes the Democrats made earlier, and how America has performed in the four years he has been in office. And finally, what does Joe Biden bring with him? We publish an abbreviated excerpt from the book on Donald Trump’s balance sheet on a balance sheet with light and shadow:
National debt is rising – under Obama, but also under Trump
What is the balance of Donald Trump’s four years in the presidency? Trump himself constantly measures himself against his predecessor, Barack Obama, and likes to emphasize that he has fought poverty in the country and has massively reduced the number of food stamp recipients.
About the author: Ansgar Graw
The studied historian and political scientist worked for WELT and WELT AM SONNTAG from 1998 to 2020, among other things as head of the media department, and from 2009 to 2017 as chief political correspondent in Washington D.C. and since 2017 as chief domestic political reporter in Berlin. The author of successful books (including “Trump Crazy the World” and most recently “The Greens in Power. A Critical Record”) has been the editor of “The European” since February 2020.
That’s right. In January 2009, when Obama’s inauguration, 33 million people received this form of welfare. According to the responsible Ministry of Agriculture, the number rose to 47.6 million by 2013. Then it sank again. In the 2016 election year, 44.2 million Americans received food stamps and, in line with the economic upswing, the number under Trump fell to 35.7 million in 2019.
The fact that the national debt almost doubled under Obama, as Trump says, is also correct. It was around $ 10 trillion in 2008 and around $ 19.6 trillion in 2016. Trump had promised in the 2016 election campaign that he would “eliminate” the US debt within eight years.
Instead, the debt increased massively even before Corona and climbed from 20.2 trillion US dollars (2017) to 22.7 trillion (2019). Should Trump stay in office until 2025, the national debt would grow by $ 8.3 trillion to $ 28.5 trillion, according to the 2020 White House report “A Budget for America’s Future”. And, mind you, this did not include the negative effects, aid measures and necessary economic stimulus packages as a result of Corona.
Under Trump: Successful tax reform
So when Trump said he was “inheriting a fiasco”, he is right about the debt – which he never tried to stop himself. In contrast, the US economy and labor market were far from being at their best when Obama switched to Trump. But they have long been developing positively. The president merely accelerated the trend.
During the election campaign, Trump promised business-friendly policies with lower taxes and fewer regulations. In 2017, its Republicans drew up the most comprehensive tax reform in 30 years. It was approved by the Senate and the House of Representatives in December of that year, largely along the party colors, with twelve votes against from Republican MPs from states such as California, New York and New Jersey.
It was often criticized that because the corporation tax was cut permanently, but income tax was only temporarily cut, the reform primarily benefited “the economy”. This is a very short-sighted objection, however. A strong economy provides additional jobs and pays higher wages, which in turn boosts consumption and thus further strengthens the economy.
African Americans benefited from Trump’s tax policies
Last but not least, people with an average lower level of education benefited from this. Among African Americans, who often have lower educational qualifications, the unemployment rate fell from 8.4 percent in election year 2016 to 6.1 percent in pre-Corona year 2019. The development was similar for Hispanics and whites without a college degree.
So Trump is not wrong when he claims that he has done a lot for blacks (even if they were certainly not the focus of his tax cuts). The fact that he believes he is almost on a par with the slave liberator Abraham Lincoln is due to his usual bragging rights.
However, as the price for deregulation, a number of environmental protection standards have been relaxed or eliminated entirely. The President cut the budget for the environmental protection agency EPA by 26 percent from the financial year 2021. At the same time, he canceled 50 ongoing EPA programs. In June 2017, he announced the termination of the Paris climate protection agreement. The formal exit followed on November 4, 2019, which will take effect one year later.
That didn’t really come as a surprise, as he had the topic of global warming in 2014 hoax and tweeted in 2012, “The concept of global warming was invented by and for the Chinese to make US manufacturing uncompetitive.”
Before Trump’s tax reform, his finance minister Steven Mnuchin promised economic growth of three percent on average over the next ten years. This would result in a balanced budget in the end. Trump was even more ambitious. With him as president, annual growth rates of four, five perhaps even six percent are possible? Is this realistic?
In the 1990s, the US achieved average growth of 3.4 percent. But this was not only due to domestic politics, but also to the global economic backlog after the collapse of the Eastern Bloc.
Trump missed all growth targets: pandemic is his excuse
The president has not only missed his own ambitious goal, but also missed the values Mnuchin cited. In 2017 the gross domestic product grew by 2.2 percent and in 2018 by 3.18 percent. In 2019, however, it fell again to an insufficient 2.33 percent. Obviously, the effect of the tax cuts was not sustainable. And then Corona came – in the second quarter of 2020, GDP plummeted by 31.7 percent.
No one could have expected this crisis, says Trump in his defense. But that’s a rush. The same applied to every previous economic downturn, whether after 9/11 in the time of George W. Bush or for the world financial crisis, with the economic consequences of which Obama had to struggle.
Trump had promised in 2016 that he would bring industrial jobs from China and Mexico back to the USA and largely decouple the country from imports, especially from China. Here, too, the balance sheet is rather poor. In Obama’s last three years in office, the number of industrial jobs rose from 14.4 million (2014) to 14.5 million (2015) to 14.7 million (2016). Under Trump it was 14.6 million (2017), 14.9 million (2018) and 15 million (2019).
This is a positive trend – but it does not mean that factories have “returned home” from abroad. Because the old industrial jobs simply no longer exist, they fell victim to automation. Today companies are growth drivers that generate huge sales with comparatively few staff, for example in the software industry, in pharmaceuticals or in semiconductors. And anyone who wants to purchase T-shirts, tools or building materials “Made in USA” has to dig deep into their pockets that most consumers will soon be able to forego them despite all their patriotism.
The Dow Jones stronger than ever
Trump boasts that under his administration America’s economy has reached “historic heights” and is “the greatest of all time”. Judging by the 29,551 points that the Dow Jones Industrial Average (the Dow for short) as the share value of the 30 largest US public companies reached on February 12, 2020, he is right.
Although the Dow crashed 20 percent in March due to the pandemic, it climbed back to over 29,000 in the first few days of September. “You are so lucky to have me as your president. There would be a crash with Joe Biden,” the president tweeted.
But a responsible economic policy also includes looking at the national debt, because otherwise you will burden future generations with your own high bill for your own well-being. With a very protectionist stance, a trade war against China (which is entirely justified on the matter) and trade war warning shots against Europe and especially Germany, Trump has not managed to decouple the USA from imports and thus trade deficits.
It did not take Corona to show that Trump did not have a sufficient economic concept. Now the next president’s main concern is dealing with the consequences of the pandemic. And about reuniting the divided America.
But is Biden doing better?
If Joe Biden comes into office, the co-pilot who sat next to Obama on the 2009/10 stimulus package will take over the helm. But whether with Keynesianism, further unrestrained national debt and tax increases, the traditional tools of the Democrats, the new crisis can be overcome is doubtful. It would be more important that society be reunited and the spirit of a new pioneering era unleashed. With as much state as necessary and as much freedom as possible. Can the Democrats do that?
America has to hope for them right now. The Republicans, deprived of their principles by Trump, as advocates of the market economy and free trade will not be available even if the incumbent is confirmed on November 3rd.
“Trump crazy (e) the world”, Ansgar Graw, Langen-Müller-Verlag, Munich, 240 pages, 15 euros