By Hancy PIERRE, Spandspecialist in international relations.
The economy is a new subject in the tradition of the Grand Old Party (GOP) if not “Reaganomic” which has fallen back on economic myths, assimilated to liberalism.
Trump is back to denounce the Democratic camp for having done a “bad job”, despite the robust growth and employment in good shape”. Trump is irritated by the current inflation that is hitting the American economy. But 16 Nobel Prize winners in economics including Joseph Stiglitz and Claudia Goldin have expressed concern about the risks of a second Trump term on the American economy.
Indeed, during the Trump administration (2016-2020) the unemployment rate was less than 4% and inflation was 6%. He boasts about this low unemployment rate. However, he did not win his re-election in the 2020 presidential elections.
Furthermore, historical references show the health of the American economy during the administrations of Bill Clinton (1992-2000) when he found a cocktail formula to lower the unemployment rate inherited from the administration of George WH Bush by 4.7% associated with a growth rate of 3.6%. Unemployment had therefore gone from 6.3% in 1990 to 3.9% in 2000. This, in view of an average growth rate of 3.1% recorded from 1970 to 2000. But the contribution of undocumented workers in productivity had weighed heavily in helping the United States to face competitiveness in the service sector.
Jimmy Carter (1976-1980), “an unloved one” had managed to contain the crisis of 1974-1975 with results that soared in the context of the recession of the 1980s in the era of Reagan’s neoconservatism. President Carter, in his first three years had created 100,000 new jobs. But the Democratic Party was going to lose to Ronald Reagan. Carter’s foreign policy did not satisfy the American people.
The topic of full employment and economic growth evoked by Donald Trump is a matter of shortcuts in debates on the economy to create special effects in political discourse.. We can make President Obama’s interventionist stance prevail in the face of the housing crisis; which was the same in 1980, at the advent of Ronald Reagan. Obama had to inject 700 billion dollars to also contain the financial failure of the banks, i.e. bad debts. Obama inherited a debt crisis whose rate is close to 419% of the GDP in 2010 compared to the rate of 350% in 2007, the GDP of 2009 being 14,266 billion dollars when the unemployment rate itself was 9.9%, despite a growth of 2.9%.
Inflation and the cost of living dominate the electoral scene according to the polls. In 2018-2019, the American economy was progressing rather well with an average growth of 2.7% of real GDP while the potential was estimated at 2.1%. In 2016-2017 an average growth of real GDP of 2.6%. Trump suggests deregulation and tax cutss. He proposes to impose a 10% tariff on American imports of goods and 60% on those from China. This, to reduce the budget deficit. Which could accelerate inflation in the opinion of many. Biden considers foreign labor essential to economic activity.
The division of the Congress and the House of Representatives is considerable in the American political system. The opposing camp is often in the majority in both houses or in one of them. The responsibility of the two houses and the presidency is shared in economic growth or crises without neglecting interest groups and lobbies which often act as a counterweight.
In 1994, the Republican majority in both houses was the largest since 1950.
In 2012, with Barack Obama, the Senate was blue with 54 seats. Subsequently, the Republicans substantially controlled the Senate under Obama during the 2014 midterm elections and kept the House of Representatives that he had controlled since 2010. Barack Obama ended his term facing the opposing party which secured the majority in both houses as was the case with George HW, Bush and Ronald Reagan. The 5.9% drop in unemployment did not improve his rating.
3 million people lost their jobs under George W. Bush which also happened under his father’s administration. Candidate John Kerry promised 10 million jobs in 4 years. But 300,000 people found jobs in March 2004 alone and 300,000 the following month which made Bush successful. They recorded a budget deficit for the end of 2004 of 521 billion dollars.
Joe Biden with a slight majority of 51 seats negotiates his policies. His administration has guaranteed a good employment climate. But inflation has repercussions on the increase in the cost of living. Also the debt weighs on the economy. As for the expenses to support Ukraine in its war activities, they would constitute a heavy burden for the future.
The economic theme in the American presidential debates is so far only an appendix.
RepAndbibliographical references
-2024 US Presidential Election
US presidential election: inflation at the heart of a confusing first debate between Joe Biden and Donald Trump by latribune.fr of 06/28/2024
-Francis Généreux “Presidential elections in the United States: the economic debate did not take place”, Desjardins, July 5, 2024Paul Lesourd, Who are you Mr. Johnson? 36th President of the United States, Editions de Paris, Paris 1963.
-William Domhoff, Who Rules the United States, Siglo XXI Editors, Mexico 1980.
Hancy Pierre, “Obama-Mc Cain: diplomacy, between contention, openness and reconciliation”, in Le Nouvelliste of 01/30/2008.
Melvin I. Urofsky, Basic readings in US Democracy, United State Information Agency, Division of the study of the United States, Washington D.C 1994.
-Elisabeth Vallet and David Grondin (under the direction of), The American presidential elections, Presses de l’Université du Québec, Québec 2004.
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