Beauty is in the eye of the beholder; the Trump and Obama economies are surprisingly similar

Originally published in the Deseret News.

After the Iowa caucus mishap, a friend of mine tweeted: “The Iowa caucuses were a perfect symbolic start to a Presidential campaign where Democrats will pretend that results don’t matter and @realDonaldTrump will focus over and over on his results.”

I thought it was a clever tweet for two reasons. First, the Iowa caucuses were a disaster and a worthy target for criticism. Second, a common refrain about President Trump is disdain for his tone and character, and enthusiasm for his results. After all, aren’t we experiencing the longest sustained economic expansion in U.S. history?

Indeed, we are, but the U.S. economic expansion is more than a Donald Trump story, just like the Great Recession was more than a George W. Bush story. Economic expansions, like the current cycle, often cross over presidential terms. Presidents also exert less control over the economy than many people imagine.

Moody’s analytics recently did an interesting side-by-side comparison of economic indicators. They compared the first three years of the Trump administration with the last three years of the Obama administration. The results are fascinating. It turns out, with a few notable exceptions, the economic performance of both presidents over the past six years is surprisingly similar.

The broadest and most commonly referenced measure of economic growth is inflation-adjusted gross domestic product, or real GDP. For this measure Obama achieved 2.5% annual growth in his last three years in office, compared to Trump’s 2.6% for his first three years in office. I’d call that a draw.

Another instructive measure of economic success is the average number of jobs added each month. For this measure, Obama averaged 220,000 a month in his last three years as president, compared to 191,000 a month for Trump’s first three years as president. Obama wins this measure, but it’s still close.

Income measures yield similar results. Real disposable income per capita is a measure of what each person in the U.S. has available on average to spend after taxes. The growth in this measure for Obama tallied 7.8% for his last three years in office, compared to Trump’s 8.0% for his first three years, another near draw. Average annual growth in household net worth for the same time period tells a similar story: Obama 5.2% and Trump’s 5.8%. Trump wins, but not by a lot.

There are also differences in the two presidents’ records. Stock values have surged under Trump, climbing nearly 40%, according to the Wilshire 5000, which is a weighted index of the market value of actively traded U.S. stocks. The same index for the last three years of Obama increased approximately 20%. That’s a big difference.

The federal budget deficit shows another big difference. The U.S. government continues to borrow and spend vast sums of money at a time when the U.S. unemployment rate is at its lowest level in over half a century. During Obama’s last three years, the average annual federal budget deficit was $600 billion. Trump has increased this by 44% to $863 billion. Here, Trump wins, but at the expense of our children and grandchildren.

There are certainly other economic measures that may show conflicting stories. That’s the nature of economics. But one thing is clear. The economies of the late Obama and early Trump administrations are not that different. In fact, they are surprisingly similar. They are both part of the same economic expansion.

In politics as in life, beauty is in the eye of the beholder. If you watch Fox News you think President Trump has created a fabulous economy, even if his tone offends. America’s future, as described in Trump’s State of the Union address, is “blazing bright.” If you watch MSNBC or CNN, you question Trump’s moral leadership and believe President Obama pulled the U.S. economy out of the Great Recession and laid the groundwork for today’s economic success.