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US: David Stockman On The Economy’s Role In The Upcoming Presidential Election

David Stockman: Well, in the befuddled mind of Donald Trump, probably a considerable role as manifest in his campaign oratory. And since there are less than 50 days left, he might get away with his groundless boasting. That is, we seriously doubt that the great reckoning will commence before November 3, meaning that he will keep peddling the “but for COVID” canard, claiming that, before that, he single-handedly created the Greatest Economy Ever.

Actually, it’s the greatest BS story ever told. It rests on the utterly misleading circumstance that the Donald entered office in month #90 of what became the longest business cycle expansion in history (at 128 months in February).

Consequently, his “record” was artificially flattered by the low U-3 unemployment rates (3.5%) that naturally occur during the last 38 months of the cycle as the inventory of unused labor is finally exhausted. Of course, that’s also exactly what occurred during the final months of the 118-month expansion of the 1990s and the 106-month expansion of the 1960s, when Democrats happened to be incumbent in the Oval Office.

But when measured by something relevant, such as the average real GDP growth rate during his tenure, it turns out that the Donald’s cherished “score” is the very worst among all the presidential terms since 1948.

That’s right. Even after setting aside the economic plunge in Q2, real GDP growth averaged 1.8% per annum during the Donald’s first 38 months in office compared to annualized gains of 1.9%, 2.2%, 2.5%, 2.7%, 3.2%, 3.6%, 3.8%, 5.2%, and 5.5%, respectively, during the terms of Obama, Bush the Younger, Bush the Elder, Eisenhower, Nixon-Ford, Carter, Reagan, Clinton, Kennedy-Johnson, and Truman.

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