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President Trump Grows the Fastest Economic Recovery in U.S. History

Despite the Democrat lockdowns, riots, looting, widespread crime and violence — the American people want what’s right, decent and good.

The fastest economic recovery in U.S. history

Under President Trump, America built the strongest economy the world has ever seen. The stock market broke records, the unemployment rate dropped to its lowest level in half a century, and income inequality fell as blue-collar jobs returned to our country.

Then, as a pandemic from China spread across the globe, President Trump made the difficult but necessary decision to shut the economy down to slow the spread of COVID-19.

Now, as we safely reopen, our economy is surging back faster than anyone predicted:

  • America added over 9 million jobs from May through July—beating market expectations three months in a row. President Trump’s historic, bipartisan relief package alone is estimated to have saved over 50 million jobs.
  • Retail spending has fully recovered and is now at an all-time high.
  • Industrial production rose for the third straight month in July, with factory output up 3.4 percent last month after a 5.7 percent surge in June.
  • The NASDAQ and S&P 500 stock indices are trading at or near record highs once again, lifting Americans’ 401(k)s.

That result is no accident. After the financial crisis more than a decade ago, it took America over four years to regain 9 million lost jobs. But following the Coronavirus shutdown, it took the Trump Economy only a few months to do just that.

“We had such a strong foundation that we’re recovering much faster than anybody anticipated,” President Trump said at a news conference on Saturday.

In addition to pro-growth, pro-worker policies long before the crisis—including tax cuts, deregulation, renegotiated trade deals, and more—President Trump responded to the pandemic by using the Defense Production Act to lead the greatest mobilization of American industry since World War II.

The Trump Administration has exercised the DPA and related authorities 78 times so far, dispersing over $3.5 billion to speed the development and manufacture of essential materials here at home. President Trump mobilized the productive power of General Motors, for example, to create thousands of ventilators for Coronavirus patients.

As a result, GM repurposed its Kokomo, Indiana, plant in just 17 days. It has now produced over 21,000 ventilators.

Other companies, including Ford Motor Company, GE, 3M, and Puritan Medical have partnered with the Federal Government to ramp up production of everything from N-95 masks to testing swabs. This nationwide effort is boosting American manufacturing, creating jobs, reshoring supply chains, and replenishing our Strategic National Stockpile.

“New factories, businesses, and laboratories are being built all over America to match our Nation’s demand for personal protective equipment, pharmaceuticals, drugs, testing supplies, therapeutics, and vaccines,” President Trump said.

President Trump’s “Made-in-America” strategy is crucial for defeating this virus, important for restarting our economy—and essential for restoring our country’s promise.

RELATED ARTICLE: We have rebuilt America’s Strategic National Stockpile

EDITORS NOTE: This Geller Report column is republished with permission. ©All rights reserved.

ECONOMY: June Jobs Report SHATTERS Expectations

America added 4.8 million jobs in June—the largest monthly increase ever recorded, according to today’s report from the Bureau of Labor Statistics.

With 7.5 million jobs added over the past two months, America’s economic comeback from the Coronavirus is taking off well ahead of schedule.

President Trump: Today’s report is “spectacular news” for America

“There’s not been anything like this—record setting,” President Trump said at a press briefing this morning. “We’ve implemented an aggressive strategy to vanquish and kill the virus, and protect Americans at the highest risk, while allowing those at lower risk to return safely to work. That’s what’s happening.”

After May and June ranked as the two largest monthly jobs gains in history, an estimated one-third of all job losses from March and April have now been recovered.

“Our work won’t be done until every single American who lost their job because of COVID gets back to work,” Treasury Secretary Steven Mnuchin said today.

June’s job gains were spread broadly across American industries, with the hard-hit leisure and hospitality sector seeing the biggest turnaround:

  • 2.1 million leisure & hospitality jobs
  • 740,000 retail jobs
  • 568,000 education & healthcare jobs
  • 357,000 service jobs
  • 356,000 manufacturing jobs

The Great American Comeback is reducing unemployment for a number of historically marginalized groups, too. African-American workers saw historic gains with more than 400,000 jobs added last month. Hispanic-American employment is up by 1.5 million, and the unemployment rate for women fell even quicker than the rate for men.

On top of that, “workers with a high school education or less made the biggest strides of all,” President Trump said.

There is more work to do in the months ahead as we rebuild the strongest economy on Earth together. The incredible, expectations-busting jobs reports in May and June, however, should give every American hope that we’re heading toward a bright future.

President Trump: Stock market is soaring with best gains in 20 years

READA Record 4.8 Million Jobs Created in June


President Trump hosts ‘Spirit of America’ showcase!

President Trump welcomed small business leaders to the White House today to spotlight their incredible work as America reopens from the Coronavirus pandemic.

“The small businesses represented in this room continue a great and noble American heritage,” he said. “You’re entrepreneurs, artisans, creators, craftsman who forge your own path, made your own products, and provide good-paying jobs for our citizens.”

Eighty percent of U.S. small businesses are now open, and new business applications have doubled since March. Thanks to President Trump’s Paycheck Protection Program, many American workers have stayed on the payroll during the pandemic, lifting incomes and helping to spark a quicker economic comeback.

President Trump: 80% of small businesses are now open

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Privatize Social Security — Even if the Market Crashes by Michael D. Tanner

There have been many good, if ultimately unconvincing, arguments against allowing younger workers to privately invest a portion of their Social Security taxes through personal accounts. There have been even more silly ones.

One of the silliest is the one regurgitated Monday by ThinkProgress, that this week’s stock market decline proves that “If Social Security Had Been In Private Accounts The Stock Market Drop Could Have Been A Disaster.”

Few personal account plans would require a retiree to cash out their entire account on the day that the market crashed. But what if they did? It is important to understand that someone retiring Monday would have begun paying into their account 40 years ago when the Dow was at 835.34. After yesterday’s decline, it opened at 15,676 today. Over those 40 years, the worker would have made roughly 1,040 contributions to their account. Only 48 of them would have been at a time when the market was higher than today’s open.

Yep, even after Monday’s crash, the worker would have made a tidy profit. In fact, his return would have been substantially higher than what he could expect to receive from Social Security.

The last time that defenders of the status quo made this argument was 2009, during the market crash that led into the Great Recession. At that time the market hit a low of 6,547.  Obviously, if workers had been allowed to start investing then, they would have done pretty well. But more importantly, retirees in 2009 would have done well too, once again better than Social Security.

Cato published this comprehensive study of that downturn and its impact on personal accounts.

Social Security is running nearly $26 trillion in future unfunded liabilities. It cannot pay promised future benefits to young workers without substantial tax hikes. We should begin a discussion of how to reform this troubled program.

A start to such a discussion would be to retire the canard about market crashes and personal accounts.

Cross-posted from Cato.org and TannerOnPolicy.

Michael D. Tanner

Michael D. Tanner

Michael Tanner is a senior fellow at the Cato Institute, studying poverty and social welfare policy, health care reform, and Social Security.

What Economic Elites Don’t Want You to Know about Crashes

A 1921 event will change your understanding of depressions by Douglas French:

The Great Recession drags on everywhere except for Wall Street, Washington, DC, and Ben Bernanke’s consciousness. “By stabilizing the financial system, we avoided much, much worse, persistently bad consequences for our economies,” Bernanke said in an interview with his old friend Mervyn King (former head of the Bank of England) on the BBC.

Bernanke says he was stimulated by the opportunity to open up his monetary bag of tricks. “I feel that the work I did as an academic paid off and that I was able to use that to help solve these problems,” he said. “That’s very satisfying, though it’s not an experience I would voluntarily repeat.”

Maybe it’s paying off for Bernanke as he makes $200,000 per speech, but for the rest of us, not so much. The former Fed chair famously told Milton Friedman the central bank wouldn’t make the same mistakes as the 1930s Fed. From his analysis, Bernanke thinks the central bank tightened the money supply in the ‘30s to cause the Great Depression. That lesson prompted him after the 2008 crash to unleash a barrage of rounds of quantitative easing and an Operation Twist while quadrupling the central bank’s balance sheet to “stabilize the financial system.”

Jim Grant sees it differently, thinking Bernanke and company should have kept their hands off the money supply and interest rates. Grant, the financial world’s foremost wordsmith, provides the depression of 1920–21 as his evidence.

His book The Forgotten Depression: 1921: The Crash That Cured Itself chronicles how the market works marvels if left alone. Grant tells the reader right away, “The hero of my narrative is the price mechanism, Adam Smith’s invisible hand.”

Yes, there was a Treasury and a still-new Federal Reserve. But Lord Keynes had not yet published his General Theory, the bible of today’s meddling monetary bureaucrats. Presidents Woodrow Wilson and Warren G. Harding ignored the downturn at best, “or [implemented] policies that an average 21st century economist would judge disastrous,” Grant writes.

The nation’s money was backed by gold, and the monetary mandarins had actual business experience to draw upon rather than just theories and equations running through their heads. The man who headed the central bank was William P.G. Harding (no relation to the president), who was born in tiny Boligee, Alabama, and was a career commercial banker. The Treasury secretaries during the period were David F. Huston, who had been secretary of agriculture, and industrialist, businessman, and banker Andrew W. Mellon.

The depression in question lasted 18 months, from January 1920 to July 1921, far shorter than the 43 months of the 1929–33 Great Depression and a fraction of the recent Great Recession. Government’s inaction proved the point Murray Rothbard made in his book America’s Great Depression (quoted by Grant): “If a government wishes to alleviate, rather than aggravate, a depression, its only valid course is laissez-faire — to leave the economy alone.”

The numbers in 1920–21 are jaw dropping. Producer prices fell 40.8 percent, industrial production dropped 31.6 percent, corporate profits plunged 92 percent, and stock prices fell by 46.6 percent. Joblessness was as high as 19 percent.

All of this pain after the Dow Jones Industrial Average nearly doubled from 1918 to the start of 1920. Speculative fever was such that those playing the market on margin were willing to pay 20 percent interest to bet on such a sure thing. “That much was evident to the miscellaneous company of lay investors who were knocking down Wall Street’s doors,” Grant writes. “Hotel chefs, undertakers, union officials and leisured ladies were among the latecomers to the frolic.”

The Federal Reserve raised its discount rate from 6 percent to 7 percent on June 1, 1920, and by Election Day of that year, the Dow was down 29 percent. Business owners demanded wages be reduced while American Federation of Labor president Samuel Gompers countered with, “We will tolerate no reduction of wages.” In the end, management won.

Herbert Hoover, who took over as secretary of commerce in 1921, sounded almost Rothbardian about the boom and bust, quoted by Grant as saying, “we speculate, overextend our liabilities, slacken down our effort, lower our efficiency, waste our surplus in riotous living instead of creation of new capital, drive our prices to vicious levels, lose our moral and business balance.” People would “have to come into the cold water in the end.”

Upon taking office in March 1921, Andrew Mellon said citizens should save the government’s money rather than spend it. Besides fiscal constraint, America benefited from the country’s high interest rates, which attracted a continuous inflow of gold. Grant explains that in the summer of 1920, gold covered 40 percent of the notes in circulation. By May 1921 that percentage doubled and the notes at the New York Fed were collateralized completely. Commodity prices collapsed and money (gold) flowed where it was most highly valued.

As quickly as it began, the depression was over. Benjamin Anderson, then an economist for Chase National Bank, wrote in his Economics and the Public Welfare: A Financial and Economic History of the United States, 1914–1946, “In 1920–21, we took our losses, we readjusted our financial structure, we endured our depression, and in August 1921, we started up again. By the spring of 1923, we had reached new highs in industrial production and we had labor shortages in many lines.”

Note to Drs. Bernanke and Yellen: this bounce was not fueled by an increased money supply. Grant makes clear in a footnote that the money supply fell 14.4 percent from March 1920 to January 22, 1921, and what the Fed had direct control of — the monetary base — fell 17 percent from October of 1920 to January 1922. From this tightness, the Roaring ‘20s was spawned.

But Lord Keynes believed the cure — instability of prices — was instead a thorn in society’s side. “The more troublous the times, the worse does a laissez-faire system work,” Keynes told the National Liberal Club in December 1923. He believed instability caused unemployment, profiteering, and precarious expectations. In the wake of laissez-faire’s great triumph, Keynes put forth the idea that has stayed with us ever since: “Mandarin rule was the new idea: governance by economists,” Grant writes.

In February 1936, Keynes’s General Theory was published and the price system was replaced by central bank stabilization forever, so far. “The General Theory is nothing less than an epic journey out of intellectual darkness,” Nobel Prize winner Paul Krugman gushed.

Grant’s Forgotten Depression makes an airtight case for a return to intellectual darkness. Keynesian enlightenment has brought us prolonged financial suffering and substandard economic growth. Bailing out big banks and failed entrepreneurs keeps capital in the hands of the inefficient, to be wasted. Remembering Hoover, we have lost our “moral and business balance.” The Fed and Treasury must get out of the way, allowing us “cold water in the end.”

ABOUT DOUGLAS FRENCH

Douglas French writes for Casey Research, Laissez Faire, and other publications. He is the author of three books: Early Speculative Bubbles and Increases in the Supply of MoneyWalk Away, and The Failure of Common Knowledge.

ABOUT JAMES GRANT