I seem to recall Trump promised to double economic growth rate

To The Daily Sun,

Senator Harold French’s spirited defense of Donald Trump’s America First “policy” in his August 15 column in The Laconia Daily Sun opens with four paragraphs extolling the unique economic contributions of the president to the economic vitality of New England:

— “New England is thriving under Donal Trump,”

— “...it came about because America finally has a president who is willing to fight for the interests of U.S. workers,”

— “The president has rejuvenated our long-stagnant economy, and

— “The impact of the president’s economic policies can be seen throughout New England….”

For French, the measure of the health of the New England economy is unemployment rates. He is correct both about record low unemployment rates and improvement over Trump’s term in office. But it is a bit like the two jockeys being interviewed after a horse race. One jockey responds, “I finished second. He finished next to last”. The other jockey simply notes “Yes, but it was a two-horse race.” It is important to remember that unemployment rates are a reflection of both the supply of and demand for labor. If one looks instead at the employment data for New England, a different perspective emerges, one that questions both French’s  “long-stagnant” assertion and his inference that it is all due to Trump.

Over the last 30 months of the Obama administration, non-farm employment in New England climbed at a 1.4 percent compound annual rate, adding on average 8,400 employees per month. By contrast, over the first 30 months of the Trump administration, non-farm employment in New England climbed at half the Obama rate, 0.7 percent, adding 4,300 employees per month. Had New England employment gains during the Trump administration maintained the Obama era pace, New England employment would be higher by over 120,000 employees. Comparing non-farm employment growth for New England to U.S. data raises a similar perspective. For the 30 closing months of the Obama administration, New England’s non-farm employment growth lagged the comparable U.S. figure by half a percentage point. Over the first 30 months of the Trump administration, New England’s non-farm employment growth trailed U.S. growth by almost a full percentage point.

Certainly, after the longest expansion in U.S history, one could argue that labor force constraints slowed employment growth. But to argue as French does that the Trump presidency produced a positive sea change in the performance of New England’s economy flies in the face of the data.

There is also some merit in thinking more carefully about the factors stimulating New England’s economic growth. I would argue an important factor in the continuing health of New England’s economy during Trump’s first years in office was the economic momentum of the Obama years and the lack of the sort of imbalances that tripped the economy into prior recessions, e.g., tight mortgage markets, overheated housing markets, inventory excess, swings to pessimism in businesses and households, and generally tight credit markets. True, the Trump tax cuts no doubt fueled short-term economic growth. But to argue that the yet unsigned United States-Mexico-Canada Agreement somehow fueled economic growth over a period of 30 months before it was signed or put into effect is fanciful. 

Quantifying the impact of regulatory reversals, exiting the Paris Agreement, or the Trans-Pacific Partnership for New England is difficult at best. And all these Trump “pluses” beg the question, “If Trump’s policies in sum were really so supportive of New England’s economy, why did employment growth slow by half when Trump promised to double growth?”

Eric Herr

Hill