For many, this is the bottom line: Will I, my family and the nation be better off in four years under a President Trump or a President Biden?
That question comes up in every Presidential election cycle. This year, Americans are asking it more urgently because of the devastating effects of COVID-19. The challenge facing the next president to rebuild the economy will be daunting.
Who Performed Better — Trump-Pence or Obama-Biden?
Trump maintains that after inheriting “a mess,” he created the strongest American economy in generations, pre-pandemic, and that voters should choose him on that basis. What are the facts?
|2016-2019 (Trump, First 3 Years)||2012-2016 (Obama-Biden, 2nd Term|
|Rate of Annual Economic Growth||+2.5%||+2.4%|
|Drops in Unemployment from Start of Term||-1.2%||-3.3%|
|Jobs Created per Month||182,000||215,000|
|Stock Market (Dow Jones Average)||+56%||+38%|
Bottom line: Call it a draw. Trump’s economy pre-COVID was good, showing particularly strong results in the stock market and the overall unemployment rate. However, Obama-Biden performed better in their second term on other indicators including job creation and the rate of improvement in unemployment. Call it a draw. (More on Obama-Biden’s first term below.)
All Right, Who Would Handle a Crisis Better?
Trump inherited a solid and improving economy and built on it. But COVID-19 has produced the deepest crisis in the U.S. economy since the Great Depression in the 1930s. Compared to other industrialized nations, our economy has fared worse during the pandemic on most indicators including unemployment. It has only been seven months, however, and Congress’s inability to negotiate continued relief has not helped.
Obama-Biden inherited a crashing economy because of the 2008 subprime mortgage crisis triggered by years of financial deregulation. During their first two years, Obama focused on passing the Affordable Care Act while Biden led the administration’s economic recovery efforts. Economists credit that recovery plan with kickstarting a decade of strong economic growth.
Bottom line: Compared to other countries, the U.S. under Trump has handled the Coronavirus poorly in terms of economic and health impacts. Biden had a longer window in which to show results, but the recovery he led beginning in 2009 was effective and long-lasting.
But in General, Republicans Work the Economy Better, Correct?
Voters tend to give the Republican party an edge on managing the economy. However, the past century and recent history both indicate that Democratic presidents have performed significantly better than Republican presidents on most economic indicators.
One reason for that disparity may be Republican reliance on tax cuts to spur economic growth. Trump’s economic expansion was built around the 2017 Republican tax cut that has been shown to primarily benefit the wealthiest 20% of Americans, has ballooned the federal deficit, and is worsening the income and financial assets gap between wealthy Americans and everybody else.
Bottom line: Once we’re largely past the effects of COVID-19, both presidents would likely lead economic recoveries. Trump’s would follow the course he pursued from 2017 through 2019. Most Americans would be better off with the Biden-version recovery, which would build on lessons from the 2008-2012 recovery and seek to reverse 50 years of dramatically worsening income disparity.