It Takes Chutzpah to Call This the ‘Obama Boom’

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Progressives are tying themselves in knots to avoid giving President Trump credit for anything positive. Take the economy. It isn’t really booming, they say, but even if it is, President Obama is the man to thank.

The claim doesn’t add up. In 2010 the Obama White House forecast gross domestic product growth would “accelerate in 2011 to 3.8%” and “exceed 4% per year in 2012-2014,” consistent with the 4.3% growth rate in the other 10 recoveries since World War II. That never happened. Actual post-recession growth averaged an anemic 2.1%. And Mr. Obama’s last year in office saw measly 1.5% GDP growth—hardly the springboard to our current expansion.

Former Obama administration economists have circled the wagons in an attempt to explain away their boss’s dismal economic record as a product of structural factors rather than policy. Austan Goolsbee has called Mr. Trump’s growth goals unrealistic. In May Larry Summers declared that accepting the Trump administration’s forecast of 3% GDP growth was like believing “in tooth fairies.”

These claims have made it difficult for progressives to explain the 3% average GDP growth rate during Mr. Trump’s first three full quarters in office. They’ve resorted instead to diminishing the president’s economic record by pointing to 2017’s full-year GDP growth of 2.3%—relatively close to Mr. Obama’s 2.1% post-recession average.

The problem for Mr. Obama’s progressive defenders is that analysts traditionally attribute the first quarter of a new presidency to the previous administration. President Bush, rather than Mr. Obama, got the blame for the negative 5.4% growth during the first quarter of 2009. What was fair then is fair now. The attempt to saddle Mr. Trump with responsibility for the economy’s performance during the first quarter of 2017 is disingenuous.

A bigger problem for progressives is that Mr. Trump’s numbers easily could have been much better. Two hurricanes held GDP growth down in the third quarter. In the fourth quarter, businesses were waiting to see if Congress would pass tax reform setting lower tax rates and enabling them immediately to write off 100% of their investments in plant and equipment. I was a CEO for 17 years; I would have waited too. This hampered fourth-quarter growth but should accelerate growth in the first quarter of 2018. The Atlanta Fed’s GDPNow model is forecasting first-quarter growth of 4%.

The jobs numbers are similarly positive. In 2017 the economy added approximately 2.1 million jobs. Progressives counter that job growth actually slowed from the 2.2 million jobs added in 2016. But job quality also matters. The Obama economy was a “part time” economy that failed to generate the full-time jobs Americans need.

According to the Bureau of Labor Statistics, the number of people working full time increased by 2.4 million in 2017, compared with only 1.6 million in 2016. In other words, the overall number of jobs added was lower in 2017, but only because hundreds of thousands of people left part-time for full-time jobs.

Both 2016 and 2017 set some year-end records. In 2016, BLS recorded the highest number of people working part time at year’s end since it began recording the data in 1968. In 2017, it recorded the highest number of people working full time at year’s end since 1968 and the fewest working part-time since 2011.

Regulatory relief and tax reform are bringing more growth and better jobs. It’s a Trump Boom, but Senate Minority Leader Chuck Schumer says the president should “thank Obama.” Perhaps, but only for setting economic bar so low.

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