The numbers don't lie. One candidate is much better for the economy
Zander's Weekend Facts #141 - Sunday, October 20, 2024
When former President Bill Clinton made a preposterously-sounding claim regarding the economy at this summer’s Democratic National Convention, it sent the fact-checkers to work. Clinton said that out of the 51 million jobs the U.S. economy has added since the end of the Cold War in 1989, 50 million were under Democratic presidents while just one million were under Republican presidents. That couldn’t possibly be true, right?
It actually was. As The Washington Post found, there’s been six presidents that have held the office since 1989, three Democrats and three Republicans. Under the three Democratic presidents, “there was a cumulative increase of 50 million more people working between the starts of their terms and the ends. Under the three Republicans… the cumulative total was, in fact, only 1 million.”
Now that’s just one statistic, and one specific timeframe. Yet, even if you expand the timeframe out to every presidency after World War II, the Democrats still hold the advantage by 56 million jobs. Or if you expand your analysis to GDP growth, Democrats also excel, with average annual GDP growth at 4.23% compared to 1.87% for Republican administrations since WWII.
Now to be clear, presidents have little direct control over specific aspects of the economy. While their policies can certainly have an impact, it is just one piece of an extremely complex puzzle (which is why blaming or praising the president for the price of gas is a bit foolish). So while the actions that administrations do, or don’t, take don’t make or break the economy, they certainly aren’t without their benefits and consequences.
Fast forward to 2024 and the economy is one of, if not the, most important issue in this year’s presidential election. And while former President Donald Trump consistently leads Vice President Kamala Harris when voters are asked who they trust more to handle the economy, the numbers tell a different story.
Back in June, before President Joe Biden dropped out of the race, 16 Nobel Prize-winning economists wrote that they saw Trump’s economic policies “would have a negative impact on the U.S.'s economic standing in the world, and a destabilizing effect on the U.S.'s domestic economy.” The economists worried that a second Trump term would bring the return of high inflation if Trump’s proposals regarding tariffs are implemented. This would be quite the contrast from the previous bout of high inflation, which was a worldwide phenomenon in the aftermath of the COVID-19 pandemic that economists have found was largely not due to the Trump or Biden administrations.
Trump has previously proposed a 10% tariff on all imports into the United States, which he has upped to 20% in recent speeches and even 50% in one appearance at the Economic Club of Chicago last week. He has also called for a 60% tariff on all goods coming into the country from China. Investopedia defines tariffs as “a tax imposed by one country on the goods and services imported from another country to influence it, raise revenues, or protect competitive advantages.”
However, as Yahoo Finance explains, “the additional costs levied on these companies often passed on to consumers in the US.” Multiple reports have shown that the implementation of Trump’s tariff proposals would cost average U.S. families almost $4,000 extra per year, with the Peterson Institute for International Economics finding that Trump’s policies would up prices for families by $2,600.
That is, of course, not to say that all tariffs are bad policy, or that Trump is the only candidate supportive of tariffs. The Biden-Harris administration has retained many of the tariffs that were originally imposed by the Trump administration, including a 100% tariff on electric vehicles from China. The argument both administrations have made, in that case, was to boost American manufacturing. Tariffs are actually commonplace among many goods imported into the U.S., but typically at smaller amounts than what Trump is proposing.
The issue is that it requires a balance. While it would benefit America to bring more manufacturing jobs home, its benefits are instantly negated if prices go up for consumers across the board. Considering Trump has consistently argued that tariffs are paid for by foreign countries (which is false), he may not even be considering the ramifications his positions would have on the economy, or the people whose votes he needs to return to the White House.
Economists are, however, and have found that Trump’s economic plan would be worse for America than his opponent’s. The Peterson Institute found in September that a Trump presidency, including his aforementioned tariff policy, executing on his plans to deport millions of immigrants, and increasing the president’s influence on the policy of the Federal Reserve, would boost inflation from an estimated 1.9% in 2026 to between 6.0% and 9.3% instead.
Trump’s policies, which also include continuing the 2017 tax cuts that mostly benefited the wealthy at the expense of the federal deficit and slashing the corporate tax rate, would increase the national debt by around $7.5 trillion according to the Committee for a Responsible Federal Budget. That’s $4 trillion higher than what was estimated for Harris’s plan. The University of Pennsylvania’s Wharton School estimates that a Harris presidency would increase primary deficits by $1.2 trillion over the next 10 years, while a Trump presidency would balloon that number to $5.8 trillion.
On the flip side, the Harris plan would increase spending by implementing an expansion of the child tax credit to $3,000 per child and up to $6,000 for newborns, increasing housing construction, and giving first-time homebuyers down-payment support. Yet, unlike Trump, Harris is also proposing ways to pay for increased spending programs, including raising the corporate tax rate to 28% and implementing a capital gains tax on anyone whose net worth is over $100 million.
Don’t let the “vibes” fool you. Republican administrations have historically been worse for the economy than Democratic administrations, and the numbers say that the trend would continue based on this year’s presidential candidates. There’s a clear better candidate for the economy, and it’s not the one who has a fixation with parts of Arnold Palmer’s body.
For more information on this week’s top story, here’s an article from CBS News - Americans say the economy is a top election issue. Here's how economists are grading it.
What Zander’s been reading
Many questions are being asked about what is increasingly looking like a disheveled campaign being helmed by former President Donald Trump in the final weeks of the presidential race. In the latest bizarre event, a spontaneous music festival launched at a Trump town hall last week, with the Republican nominee awkwardly bopping and swaying on stage for over half an hour. (Here are the highlights.)
Check out this week’s featured article in The Atlantic - Trump Breaks Down Onstage
Rapid-fire Facts
Here’s a recap of the top news headlines from the past week:
Presidential Election: The 2024 U.S. presidential election is down to the final weeks as polling shows a tight race. Last week, Democratic nominee Vice President Kamala Harris conducted her first interview with Fox News on the same day Republican nominee former President Donald Trump held a town hall on the same network. Swing states such as Georgia and North Carolina have also begun early voting, with both aforementioned states seeing early turn-out records. Election Day is on November 5, just over two weeks away. Get all the latest election headlines from the Associated Press link below, and make sure you have a plan to vote by going to Vote.org.
Israel-Hamas: The year-long war between Israel and the Palestinian militant group Hamas took another turn last week after the death of Hamas’s leader. Yahya Sinwar, who was the leader of Hamas and seen as the architect of the October 7, 2023 attack that ignited the current conflict, was killed by Israeli forces in southern Gaza on Wednesday. Sinwar had spent over two decades in an Israeli prison before being released as part of a prisoner swap in 2011. Sinwar then became the leader of Hamas in 2017. While the U.S. initially hoped that Sinwar’s death would increase the likelihood of a ceasefire in the conflict, talks have yet to materialize.
Georgia Election Rules: A Georgia judge has struck down the state’s new election rules that were adopted just weeks before the November elections. Georgia’s State Election Board, which is controlled by Republicans, has passed several new rules in recent months, including a requirement to hand-count every ballot and rules surrounding the certification of elections. Fulton County Superior Court Judge Thomas Cox argued that the rules were implemented too close to this year’s elections. The State Elections Board is appealing the ruling.
Click-To-Cancel: The Federal Trade Commission unveiled a new rule that will make it easier to cancel memberships and subscriptions. The rule states that businesses, including gyms and retailers, must make the cancellation process “at least as easy to use” as the sign-up process. The FTC’s ruling, which will go into effect next year, means that sign-ups for subscriptions that occur in person must now have the option to be canceled by phone or online. The FTC voted 3-2 on Wednesday to approve the rule, with the commission’s two Republican members opposing the move. The move is one of the Biden administration’s final policy decisions before next month’s presidential election.
Cuba: Massive power failures have caused Cuba to go dark after the country’s power grid collapsed twice last week. As of Saturday, the over 10 million people on the island had no indication of when power would return. Cuba’s deteriorating infrastructure, coupled with less oil coming into the country from trading partners Mexico, Russia, and Venezuela, has exacerbated the crisis that began on Friday.
Zander’s Facts Sporting Club
Here are the latest headlines from the sports world in the Sporting Club:
NFL Week 7: The Patriots and Jaguars kick off today’s NFL slate in London at 9:30 am ET. This afternoon, Eagles-Giants, Texans-Packers, and Lions-Vikings highlight the 1:00 pm ET window. At 4:00 pm ET, the Rams host the Raiders, the Panthers take on the Commanders, and the Chiefs visit the 49ers in a rematch of last year’s Super Bowl LVIII. The Jets go to Pittsburgh to take on the Steelers tonight at 8:20 pm ET to close out the day. Monday night features another double-dip, with Ravens-Buccaneers at 8:15 pm ET and Chargers-Cardinals at 9:00 pm ET. Week seven opened up on Thursday night as the Broncos ran over the Saints, winning 33-10 in New Orleans.
College Football Week 8: The lower-ranked teams got the best of the weekend’s best matchups in the SEC. #11 Tennessee took down #7 Alabama 24-17, while #5 Georgia upset #1 Texas on the road 30-15. Elsewhere across the country, #6 Miami survived a thriller against Louisville 52-45, #19 Missouri came back to beat Auburn 21-17, and #16 Indiana dominated Nebraska 56-7. Plus, #9 Iowa State survived UCF 38-35, #12 Notre Dame beat Georgia Tech 31-13, #22 Illinois took down #24 Michigan 21-7, and both #23 Army and #25 Navy remain undefeated.
MLB Postseason: The New York Yankees have clinched a spot in the World Series, while the Los Angeles Dodgers are one win away. The Yankees took down the Cleveland Guardians in Saturday’s Game 5 to win the series 4-1 and advance to their first World Series since 2009. The Dodgers lead the NLCS over the New York Mets 3-2, with the Dodgers hosting the Mets tonight in Game 6 of the series at 8:08 pm ET on FS1. If the Mets win, Game 7 will take place on Monday at 8:08 pm ET on Fox and FS1. The World Series will begin on Friday on Fox.
NBA Season Opener: The 2024-25 National Basketball Association season opens on Tuesday as the Boston Celtics look to defend last season’s championship. The Celtics open the season at home against the New York Knicks on Tuesday at 7:30 pm ET, with the Minnesota Timberwolves at the Los Angeles Lakers following at 10:00 pm ET. Both games will air on TNT. ESPN will air a doubleheader on Wednesday with the Milwaukee Bucks facing the Philadelphia 76ers at 7:30 pm ET and the Phoenix Suns taking on the LA Clippers at 10:00 pm ET.
WNBA Finals: The final game of the WNBA season will take place later tonight with the league’s championship up for grabs. The New York Liberty will host the Minnesota Lynx in Game 5 of the WNBA Finals later tonight at 8:00 pm ET on ESPN. The winner of tonight’s game will clinch the WNBA title, with the series currently knotted up at two games a piece. The Lynx are searching for their fifth league title, which would break a tie with the Seattle Storm and defunct Houston Comets for most all-time. The Liberty, on the other hand, are seeking their first title in franchise history.
Wrapping up the Facts
That’s a wrap on this week’s edition of Zander’s Weekend Facts. The Facts in print return next Sunday, October 27, 2024.