Obama vs. Trump: Economies Compared
In this 2017 column, “Presidents Have Less Power Over the Economy Than You Might Think,” economist Neil Irwin says it all in the title.
He also emphasizes chance and patience: “Put simply, when you take office at the bottom of a recession and with unemployment high, you can ‘achieve’ a lot of growth just from the natural healing of the economy. When you take office at the top, there is nowhere to go but down.”
This Rantt article looks at the most-headlined-about economic stats, as well as how they compare between presidencies. While we can’t look at the numbers to lionize or demonize a president, we can still do it to understand the long-term – a key point that Trump doesn’t seem to be getting, no matter how many shiny stats he cites. “None of this means that presidents can’t do a lot to make the United States economy more dynamic and productive,” Irwin writes. “It’s just that doing so could take a great while.”
Trump And Obama’s GDP Growth Compared
Gross Domestic Product (GDP) is the value of total goods and services produced and bought in a country. For instance, if you just bought up all the toilet paper from your local BJ’s, it would probably cost you $400 (or more, who knows? Don’t do it). That $400 would then be added to the GDP.
It is calculated every year, does not include foreign investments (that’s the Gross National Product’s (GNP’s) job), and does not consider the economic impact of adverse events that may have led to your toilet paper hoarding.
A yearly growth rate of 2-3% growth is ideal. That’s the statistic we’re interested in – not GDP, but its growth.
The quick and clean: Average GDP growth under Trump is higher.
The thorough and keen: In 2009, Obama inherited an economy with a GDP of -2.58%, but dramatically picked it up in the following years, where it continues to hover between 2.5 and 1.5%. HIs administration hit over 5% GDP growth on multiple occasions. The Poynter Institute also noted that GDP growth surpassed that ideal top of 3% twice during his presidency..
These GDP increases are higher than any of the current administration’s. In 2018, President Trump saw a GDP increase of almost 3%, up from the 1.57% of 2016. But last year, that growth fell to 2.3%.
Trump And Obama’s Unemployment Rates Compared
Unemployment happens when you’re over 16, out of a job, and searching for one. In a previous article, we looked at unemployment trends over the past 60 years.
The quick and clean: Obama’s average was 7.44% and Trump’s, as of late March 2020, 4.8% – the lowest since President Johnson. This stat led to reports of “50-year unemployment lows” and profuse presidential self-congratulating.
The thorough and keen: Again, Obama inherited the “unique disadvantage of taking office in the midst of the worst financial crisis since the Great Depression,” according to the Annenberg Public Policy Center. Although Obama’s average unemployment rate, over the span of eight years, was high, he left it at the low where Trump found it. And “getting down to that point was a long, slow grind,” contributing to Obama’s high average.
In September 2019, Trump’s administration saw a continuation of the trend towards 3.5% – the lowest in the last 50 years. Now, amidst economic shutdowns during the COVID-19 pandemic, we see Trump’s Administration warning of a 20% unemployment rate.
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Trump And Obama’s Job Growth Compared
Job growth is an easy one, right? It’s just, well, how many new jobs have opened up. It is measured every month. Why do we need to be creating jobs? New people need to be finding them.
The quick and clean: Trump often claims his economy is unprecedented in its strength. CNN reported that the Obama administration saw 7.9 million job gains in its final 35 months, whereas Trump’s saw 6.7 million in its first 35 months.
The thorough and keen: Job growth seemed to be stagnating even before the pandemic, even though Trump kept boasting. MSNBC wrote:
“For example, the revisions for 2019 showed that the economy generated nearly 2.1 million jobs last year, which is a pretty good number. The trouble, however, is the job totals from last year were down from the year before, and were actually the lowest since 2011.
“Or put another way, while Trump spent the year boasting that the U.S. job market was the strongest it’s ever been, 2019 saw job growth slow to an eight-year low.”
Snopes added, “[I]f Trump proposes that he is to be thanked for employment growth, his own logic dictates that he should be blamed if that rate of growth is slowing down.”
Trump And Obama’s Income Inequality Compared
Income inequality is the wealth gap, and should be studied by demographic group to be better understood.
Income inequality can be estimated with the Gini coefficient, between 0, perfect equality; and 1, where only the richest make money. The Organisation for Economic Cooperation and Development (OECD) shows the US as one of the most economically unequal countries by this measure:
The quick and clean: The Gini coefficient has bounced around, and median household income has been growing every year since 2013, between Obama and Trump.
The thorough and keen: The Gini coefficient displays greater inequality in Black households. See highlights below.
Table H-4. Gini Indexes for Households, by Race and Hispanic Origin of Householder:
2012 to 2018
Trump And Obama’s Stock Market Compared
The stock market can sometimes seem like the distant relative you vaguely remember doing magic tricks at your 7th birthday party.
This, at least to me – distant, mystical. You remember some initials, maybe an S&P, maybe a Jones in there. Who has a name like “Dow,” anyway?
Well, the S&P 500 and Dow Jones are just indices that sample from the stock market to give you a pulse. Here are their official definitions:
The quick and clean: The S&P 500 measured a 75% increase during Obama’s first 798 trading days, whereas Trump, now in the uncertain coronavirus economy, is at -1% (source).
The thorough and keen: Obama’s recovery economy saw the longest bull market in history, whereas in February 2020, Trump presided over the market’s all-time high.
That one fell sharply.
The Rantt Rundown
- GDP growth: Higher under Trump, but Obama’s recovery economy picked it up by 5% at the beginning of his presidency.
- Unemployment rate: The trend downward between presidencies continues, but coronavirus is going to change this.
- Job growth: Obama’s administration saw more job growth. Trump is wrong to boast.
- Income inequality: The Gini coefficient shows the US as one of the most economically unequal countries, and should be studied in the context of demographic groups. Median household income has been on the rise.
- Stock market: Obama presided over a stock market that grew more. Trump saw a historic high, which has fallen in the pandemic.
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