Trump actually has not tampered with the economy much since he took office, and it is still pretty much following the course set by Obama. Of course, Obama was almost entirely hemmed in by Republicans so he could not raise the minimum wage or apply more stimulus, but he still had the economy headed in a good direction — steady growth and steadily falling unemployment.
Trump has cut taxes a bit (more for the rich and corporations) and this has likely provided a small Keynesian stimulus. He’s messed around with tariffs a little, which has provided a small amount of negative stimulus. And the Fed has provided a bit of stimulus to offset the trade problems.
The problem is that Trump is going to get a whole lot of credit for what Obama did. By continuing on the same course, unemployment has reached very low levels by historical standards.
The graph above shows that the most stable measure of unemployment has (almost) continued Obama’s trend under Trump.
Taxes and Inequality
President Kennedy proposed and LBJ passed a tax cut that (along with similar cuts for others) reduced the top rate from 90% to 70%. That was in 1964. Ronald Reagan cut the top tax rate from 70%. That was done as a Keneysian stimulus for the economy and the conservatives opposed it.
Reagan cut the top rate by more than half, from 70% to 30%. There were much smaller cuts for the lower brackets and inflation was pushing people from lower brackets to higher ones. So basically only the rich got those tax cuts.
Given how wealthy the rich have become, it’s really important to return to a top rate of 70%.
Ripped Apart
