Hey righties, you will never 'own' any of what is

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NEW YORK — On the campaign trail, Donald Trump repeatedly described the U.S. economy as a hollowed-out disaster of high unemployment and stagnant growth.

But the latest numbers show the president-elect will in fact inherit a fairly robust economy with the lowest jobless rate in nearly a decade, record home and stock prices and a healthy growth rate.
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It’s a radically different position from the one President-Elect Barack Obama found himself in 2008 with markets crashing, the financial crisis spinning out of control and joblessness headed toward 10 percent.

Trump instead will take office with an economy near full employment and wages and spending rising. The economy is in such strong shape that the Federal Reserve is likely to raise interest rates again later this month to try and cool things off.

“President-elect Trump will inherit a much stronger economy than his predecessor did,” Standard & Poor’s economists said this week. “Largely forgotten in all the rhetoric and fanfare of the campaign is the fact that data show the world's largest economy continuing to expand at a reasonably good pace.”

The recent gains are now allowing outgoing Obama officials to take something of a victory lap as they head out the door.

No figures ever backed up Trump’s claims of soaring joblessness and no growth. The economy grew at a 3.2 percent pace in the third quarter. It could slow down again in the final quarter of the year. But the pace of job growth remains quick enough to keep the jobless rate falling and wages rising as employers compete for a smaller share of available workers.

“The labor market is pretty healthy and it’s clearly growing enough to stabilize the jobless rate,” said Jim O’Sullivan of High Frequency Economics. “In fact it’s booming relative to our underlying demographics right now.”

The question for economists, however, is whether Trump’s recipe is actually what the economy needs.

While there is widespread agreement that the U.S. corporate tax code is broken and in need of a fix, there is far less consensus around the kind of massive individual rate cuts Trump is proposing -- not to mention his trillion-dollar infrastructure package and calls for a boost in defense spending -- that could increase the long-term debt and deficit.

“This is an economy that’s pretty close to full employment. It would have been great to have even more fiscal stimulus eight years ago but I don’t know that’s the case now,” said Luke Bartholomew, Fixed Income Investment Manager at Aberdeen Asset

Management. “There’s clearly a case for infrastructure spending and taking advantage of rates that are this low. But big individual rate cuts especially for high earners to unleash this kind of supply side magic that they think works, I don’t think the evidence is very strong for that.”

And Democrats are using the strong economic numbers to argue for keeping Obama’s approach to the economy in place rather than switching to big across the board tax cuts. “Today’s jobs numbers show just how far we have come in the past eight years.

When President Obama took office in 2009, we were losing 800,000 jobs every month,” Rep. Carolyn Maloney (D-N.Y.), the ranking member of the Joint Economic Committee, said on Friday.

“I hope that the Trump administration and congressional Republicans will not undermine the great progress we have made by taking us back to the policies that led to the Great Recession in the first place.”

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