Twenty years from now, historians looking back at Republican presidential nominee Donald Trump’s acceptance speech will be mystified by many things. The shouting, the color of the hair, and the almost complete lack of discussion of the economy—notwithstanding Trump’s fulminations about bad trade deals and trade deficits.
They will be further mystified when they look at what was actually going on in the economy. To listen to the speech, you’d have no sense that the U.S. economy was in its 85th month of expansion and that:
- The economy had added payroll jobs for a record 69 straight months (including 287,000 in June alone).
- Stock market indices stood at or near record highs, having doubled since 2009.
- The rate of those without health insurance had fallen in half and stood at its lowest level in decades, and;
- Corporate profits have been levitating at or near records –in absolute terms and as a percentage of GDP.
Were such an economic record to have been compiled under a Republican president, the entire convention—from the lowliest speeches in the 5:00 p.m. hour to the keynote to the acceptance—would have boasted of the huge gains in the economy and the markets. And each speaker would have pounded home the message that the only way to keep the party going would be to elect Republicans.
But in Cleveland, when the historic ‘party of business’ came together, there was a willful collective ignoring of the economic reality of the U.S. – aside from stagnant wages. That’s not at all surprising. This is how politics tends to work. Republicans couldn’t acknowledge the gains because they took place under a Democratic president, because they opposed virtually all the measures that helped lead to the recovery, and because they explicitly warned that it couldn’t happen.
It is a real problem for the GOP that, over the last several years, the party of capitalism and free enterprise has arrayed itself—rhetorically and politically—against this expansion and recovery. For Republicans to succeed at the presidential level in 2012—and in 2016—the markets and the economy had to fail.
The apocalyptic warnings started early on. In March 2009, on the very day the stock market hit its bottom, George W. Bush economic adviser Michael Boskin warned loudly in the Wall Street Journal editorial page, that “Obama’s Radicalism is Killing the Dow.” While the bailouts of the auto industry and financial sector were engineered and put in place by a Republican administration in 2008, the congressional Republican party turned against them very quickly in 2009—essentially hoping that the auto industry wouldn’t recover. Virtually every Congressional Republican voted against the 2009 stimulus package, which included plenty of tax cuts, and immediately began hoping it would fail. Ben Bernanke, a lifelong Republican who served in the Bush administration and was first appointed to head the Federal Reserve by President George W. Bush, became a GOP hate object for his efforts to boost the economy through quantitative easing and low interest rates.
When Congress passed the Affordable Care Act in early 2010, Republican critics argued it would kill jobs and fail to expand coverage. Instead, the rate of those uninsured has fallen in half and the U.S. has added 14.4 million payroll jobs.
This is kind of par for the course. Overtly or quietly, the out party always hopes that the economy will falter under the in-party’s watch. Sagging GDP and higher unemployment rates help make the case for a change in control, even when the president has done a decent job. In 1992, George H.W. Bush, was running for re-election after what was, by objective measures, a successful term: He engineered a deficit-closing budget deal, effectively managed the end of the Cold War, and repelled Saddam Hussein’s invasion of Kuwait. And yet he was undone by a relatively shallow recession. “It’s the economy stupid,” as challenger Bill Clinton took it.
For the last eight years, this convention of politics has put Republicans in the uncomfortable position of hoping that the markets would crash, that the economy would falter, and that corporate profits would decline. But that hasn’t happened. To be sure, the results of the last several years have not been a complete vindication of the policy approach of the years 2008-2010—median incomes have stagnated, the pace of overall economic growth is slower than it should be, our infrastructure is suffering. But they’re hardly a refutation.
So what was there to say in Cleveland? Beyond vague talk of ending regulation, cutting taxes, and repealing Obamacare, there was virtually no policy discussion, no promise on how a Republican president could get the markets moving on, boost employment growth, and reduce the unemployment rate. To make this case would be to acknowledge the current reality of 4.9% unemployment and the Dow Jones Industrial Average at 18,500. Offering an honest assessment of the state of the economy and markets would beg the question as to how the economy and the markets got to current levels from those of early 2009. Given their opposition to the policy of the last several years, Republicans lack a vocabulary and narrative to account for or explain the recovery and the expansion.
Something tells me the Democrats won’t have the same problem when they convene in Philadelphia next week.