WASHINGTON. When Donald Trump was sworn in as the 45th President of the United States, numerous and very serious problems confronted America. But from day one of his administration, he got right to work solving those problems, winning battle after battle even as he faced spurious and unfounded smears and slanders whose intent was to undemine his ability to govern. Political and governmental opponents called for his impeachment even before he took any actions.
But despite the odds, Trump just keeps on winning.
Obama’s “fundamental transformation” of the American economy
The prior administration had been so concerned with curing perceived social injustices that they passed thousands of counterproductive regulations in the name of “fairness.” These regulations were meant to stop business from taking advantage of consumers and to stop banks from making loans to people who couldn’t afford them.
Another core problem was the Democrats’ draconian Dodd/Frank bill. That bill essentially brought a halt to predatory lending, which was a good thing. But it also indiscriminately restricted all lending in the broadest possible way. The result was an almost immediate withdrawal of credit from any business without a superb credit rating. This essentially barred small businesses, startups, and mom and pop businesses from their once customary access to credit.
Without banks making loans, monetary policy cannot stimulate economic growth. Under Obama, the increasing thicket of regulations on business also slowed economic growth.
Donald Trump launches his economic winning streak
From the outset of his presidency, Donald Trump began his winning streak by rescuing the moribund American economy he inherited from Barack Obama. At the time, the economy seemed even to lack a pulse. Consequently, America remained mired in a 2% growth mode which the prior administration blithely referred to as the “new normal.”
But the government’s permanent bureaucracy and the media alike failed to attribute this economic somnolence to Obama’s growing list of regulations and redistributionist policies. These factors blocked America from experiencing the robust rebound that typically followed all post-1930s recessions. At the time of Trump’s electoral victory, America’s lackluster growth was becoming a long-term and potentially irreversible problem.
Trump noted that the US economy had not experienced an annual growth rate of at least 3% since 2005. Worse, it hadn’t enjoyed a 4% annual growth rate since 2000. The country’s consistently poor, post-recession growth rate meant that millions of unemployed and underemployed college graduates were forced to take jobs which did not require a degree.
More winning: Slashing useless regulations and getting Americans back to work
Worse yet, American workers young and old without a degree quickly discovered that no opportunity were available to them at all. Five to six million Americans became so discouraged that they simply dropped out of the labor market.
That’s why, as he began his presidency, Trump began to slash Obama’s thicket of executive orders and agency regulations. He quickly reversed literally hundreds of the worst of those growth-stifling regulations. His administration and the GOP-led Congress, as appropriate, terminated many more.
Since then the American economy has been growing at a 3% annual rate. In fact, on Wednesday, just 18 months after Trump’s inauguration, administration officials estimated that the American economy grew at a 4.2% rate in the latest quarter. The financial media previously declared with virtual certainty that this would never happen. They couldn’t imagine winning with Donald Trump.
In addition to his work eliminating counterproductive rules and regulations, President Trump also got Congress to repeal parts of the growth-stifling Dodd/Frank bill.
Going beyond regulations, the President also convinced Congress to cut taxes big time for all Americans and for American corporations. This resulted in the December 2017 GOP tax cut bill that lowered individual and corporate taxes to record low rates in modern times. It put more money in worker’s pockets, launched a vigorous hiring frenzy and almost instantaneously revived American businesses. Even the dying businesses of steel and coal mining came back to life.
Trump gets serioius about America’s international trade disadvantages
Trump also examined America’s disastrous existing international trade deals. Virtually every one, including NAFTA, was slanted in favor of our trading partners and to the detriment of the US. Hundreds of billions of dollars were flowing out of the US annually.
These serious international trade issues had long-stifled American exports and nearly destroyed America’s balance of trade. Trump acted quickly. He put an immediate end to the redistributionist Paris Climate accords, and terminated any further consideration of the Trans-Pacific trade pact — yet another bad, Obama-generated deal for America.
Along with these moves, he took a tough stand on free trade to bring our reluctant trading partners to the table to renegotiate existing trade deals. Already the European Union, Mexico, South Korea, China and Japan are in discussions or have made new deals. Earlier this week, the administration announced its latest deal, a NAFTA replacement agreement with Mexico. Odds are increasingly favorable that the reluctant Trudeau government in Canada may join this pact later this week.
Bottom line: In spite of some short-term pain for certain American businesses, in the long-term foreign markets will finally be opened to US manufacturers in a way they have not been for decades.