While Hillary Clinton and Donald Trump don’t agree on much, the sharpest divide may be how they view the U.S. economy.
Trump has been selling Americans a version of the economy where conditions are getting worse; we’re losing jobs, wages are stagnant, trade deals are terrible and the national debt is growing. He reiterated many of these themes during Sunday’s town hall debate.
But are President Obama’s economic record, and Hillary Clinton’s economic platform, really as vulnerable as the Republican nominee would have us believe?
There’s no doubt growth has been slow. Throughout the six-year recovery it has averaged just 2.1%, and in the second quarter the U.S. economy inched along at a pace of 1.4%. Compare this with the recovery following the recession in the 1980’s, where the pace of expansion averaged 4.6%. However, it is prudent to keep in mind that recession was not as severe as the 2008 financial crisis.
“I admire President Obama. He inherited the worst financial crisis since the Great Depression. That was a terrible time for our country… We are back on the right track,” said Clinton during Sunday’s debate.
According to Jared Bernstein, chief economist and economic adviser to Vice President Joe Biden from 2009-2011, the economy is moving along just as it should be.
“Real gains are being made by people who have… been left behind. On another hand these folks are still climbing out of a deep hole, and they’re kind of where they were before the recession started,” he tells FOXBusiness.com.
It’s true that job growth has been tepid throughout the recovery, and as Bernstein concedes, we didn’t start adding new hires until 2010. In September the U.S. economy added 156,000 jobs, much lower than the expectation of 175,000.
Still, what you don’t hear from Trump and the Republican camp is that we are closing in on full employment, albeit seven years later.
Trump also claims “we have the slowest growth since 1929.” While that statement is false, the pace of this expansion has been the weakest of any since 1949.
Donald Trump has promised to increase growth to 6% through a slew of economic policies including ending corporate inversions thereby bringing back jobs and boosting wages; the latter of which is another big focal point for Republicans.
“Wages have stagnated for a long, long time in this country; really ever since the late ‘90s for moderate income workers,” former Senator Rick Santorum (R-PA) told FOXBusiness.com.
In fact, inflation-adjusted median household income has fallen by $178, or 0.3%, to $57,304 since Obama took office, according to Sentier Research.
However, as Bernstein points out, that pattern of stagnation appeared to break last year. The Census Bureau’s data showed a 5.2% growth in household income, which is the largest single-year increase since the bureau began recording this statistic in 1967.
“If you believe Donald Trump’s characterization of the economy, then you have to assess whether his policy agenda, which I find very incoherent, will actually help. But the economy he’s painting is one that doesn’t really match some of the numbers,” Bernstein says.
Santorum disagrees and believes Trump’s platform contains a trifecta of competent policies that will benefit struggling American families and workers; these are immigration, energy and trade.
“A lot of blue collar jobs… have been damaged by President Obama,” Santorum says. “If [Hillary Clinton] continues to move left, I have no doubt that she will have policies that are just as egregious… as the President.”
Beyond party lines, and in a rare moment of acquiescence, Bernstein did acknowledge that Trump is tapping into something quite tangible; there is a frustrated section of the population that has been largely left out of this economic recovery.
“What the heck is Trump talking about? Well he’s talking about some people in some places that have been left behind. And that’s real. And then the question is which one of the candidates has the agenda that is most likely to reach those folks.”
When FOXBusiness.com asked what needs to be done to improve the economic situation, Bernstein replied, “I think we have to not only stay on the track we’re on, but ensure that the benefits of growth reach people that have been left behind.”
Hillary Clinton’s economic proposals include raising taxes on the wealthy, corporations, lifting the estate tax and capital gains. She is also promising to boost infrastructure spending and increase regulation on Wall Street, while offering tax credits for long-term investments and new hires.
Many view this platform as a direct extension of the Obama administration’s current economic policies. But what the Democrats want to know is, as the labor market approaches full employment, household incomes register their largest gains since the 1960’s, and the unemployment rate falls to pre-crisis levels, is that really such a bad thing?