President Donald Trump gave an extremely positive State of the Union speech on Tuesday. An impressive 75% of listeners approved it. He painted a rosy picture of a booming economy and a successful foreign policy. However, what is the objective reality and how should Trump and the SOTU in 2018 be graded?
GDP: For a guy who promised 4% or 5% GDP growth, the 2017 GDP growth was 2.3%. Meh! It was worse than the corresponding figure during many years under Obama.
Unemployment and jobs: Of course, Trump boasted about the lowest unemployment level in decades (4.1%). The more realistic number is the U-6 unemployment rate, which is still high at 8.1%, although down from 9.1% in Dec. 2016.
As for jobs, 2017 added 2.1 million jobs, or 175,000 jobs per month on the average. It was actually lower than the previous five years under Obama!
On a side note, Trump used to make fun of Obama for not adding at least 300,000 jobs per month!
In fact, the best indicator of the employment situation is the actual number of employed Americans.
In Dec 2016, there were 152,233 million Americans with jobs. That number changed to 154,021 million by Dec 2017. Thus the change in employment = ~1.8 million. Wait a minute! But the jobs added were 2.1 million! Yup. More jobs than people. How so? Multiple jobs per person. So let’s take a look at the change in employed Americans for the last few years. You can see that Trump helped fewer people get jobs in 2017 than Obama did in many years.
Let’s not forget that retail took a beating in 2017. It was truly a retail apocalypse, with more than 8600 store closings! Radio Shack, JC Penney, Macys, Sears, Abercombie & Fitch, Gap, BCBG, American Apparel, Toys R Us, Payless, Walgreens … you name it. This includes many retailers who filed for bankruptcy (Chapter 11) as well.
Retail employment fell by 67,000 in 2017, after rising 200,000+ in 2016. It’s not just because of Amazon. It’s got to do with the corporate debt that’s finally catching up. Retail closing is probably going to get worse – some predict the number will be 12,000 in 2018.
Wages and jobs: While Trump fibbed that wages are growing, the average wage grew only 2.5%, which is the normal these days, although 3% is the healthy number that economists recommend. Nothing Trump can do about it. But still, it means that, after inflation, the wages for most Americans barely budged. Yes, a few people got bonuses because Trump allowed the corporations to repatriate (bring back) hundreds of billions of dollars from offshore banks. But this trickle down is a one-time event and not a fundamental change.
The median wage for salaried, full-time workers has actually gone down a bit from Jan. 2017 to Dec. 2017.
Debt, federal deficit and trade deficit: Trump did well regarding federal deficit. It may be because the dollar weakened by 10% in 2017 against other currencies. The national debt grew a lot less in 2017, compared to Obama years. In 2017, the federal total debt went up by “only” $500 billion.
As for trade balance (deficit or surplus), remember all the great promises by Trump? “I will negotiate hard, name China as a currency manipulator, renegotiate trade deals and stop our trade deficit!” Well, 2017 was a record year for trade deficit!
US trade deficit with both Mexico and China went up in 2017 (by 11% and 7% respectively)! This is a horrible stat for Trump who ran on this platform.
Trump got some good deals signed up with China during his visit, but those are long-term projects. He hasn’t been able to renegotiate or even make any real progress on NAFTA or WTO. His tariffs on solar and washing machines are kind of silly and may result in more U.S. job losses. There has not been any meaningful flow of manufacturing jobs back to the U.S. — why would the companies do that, unless they’re forced to.
Stock market: During the campaign, Trump correctly identified the stock market as a bubble. Now he embraces the debt-fueled insanity that was created by the Federal Reserve Bank. Average Americans shouldn’t celebrate the stock market. And there are many good reasons why there might soon be a financial crisis.
He did quickly defeat ISIS in Syria and Iraq! And he did not get into a huge war in Syria. But he has left many military bases in northern Syria still and the U.S. is colluding with Kurds and still hoping to Balkanize Syria in sneaky ways. He has also sent more troops to Afghanistan where Taliban has grown stronger in 2017. (We need to get out of Afghanistan).
Globally, Trump has screwed up America’s image. Big league! Now the U.S. is viewed less favorably than China and barely above Russia!
Regarding relations with North Korea, China, Russia, Pakistan, Turkey, Afghanistan, Iran etc., it has not been a good year. The Jerusalem issue is popular with Trump’s base, but got rebuked by 128 countries at the UN. Jared Kushner and his buddy in Saudi Arabia – Crown prince Salman – royally messed up the situations in Yemen, Qatar and Lebanon.
Even the allies in Europe are perplexed and bothered by Trump. Only 9% of Germans approve Trump. He had to apologize to Piers Morgan for his re-tweeting of Britain First so that he can go to the U.K.!
From the view point of conservatives, there is still no wall, the deportation numbers of illegal immigrants are low, and DACA/Amnesty issues haven’t been resolved yet. Republicans can however be very happy about the conservative Supreme Court Justice, Trump’s deregulation efforts and a massive tax cut.
Overall ranking: America is too divided and too partisan. Rather than Democrats and Republicans working together, they simply try hard to make each other fail. Totally dysfunctional. That said, Trump’s diplomatic and management skills are certainly unorthodox and chaotic. My grades for Trump would be as follows.
B- for GDP, unemployment, wages and jobs added
D for trade, foreign policy, and bringing the country together
B+ for conservative issues and debt
A for keeping his base happy and loyal
How do you evaluate him?