As Donald Trump’s inauguration looms closer, it’s impossible not to try and compare the early actions of the new leader against his predecessor. Obama, for better or worse, has certainly pushed many changes into America. Looking at simple numbers and indisputable facts, let’s compare some of Obama’s biggest claims of success to the early effects of Trump’s election.
Employment
Obama sticks to large claims of success in this department. He cites a 4.6 unemployment rate and a total jobs creation in the thousands. Critics are fast to point out that seasonal adjustments were completely reformed by his administrations and unemployment is no longer a reasonable metric.
Critics also highlight that a large number of unemployed people have stopped reporting under his administration. In that light, labor force participation is the key metric, and it has steadily declined over the last eight years. In Obama’s tenure, the total workforce has dropped by a total of 3 percent.
Trump, on the other hand, created roughly 34,000 jobs as a civilian, and the month since his election has shown a complete rebound in the jobs market. More than 178,000 new jobs were created in the Trump Bull Run. While that isn’t enough to raise labor force participation by a full point, it is the first sign of a long-term reversal seen in the last eight years.
Stocks
Let’s be completely fair. Stock markets were in very bad shape when Obama entered office. Fortunately for his legacy, they hit rock bottom in 2008, making it very easy for him to boast only increases. The dip that preceded his inauguration brought the Dow down to 8,000. Just before the election, things had leveled around 18,200, making for a long-term monthly average increase of 318.
In the month of Trump, the Dow increased all the way to 19,520, for a monthly gain of 1,320. Now, let’s try to be as fair as possible. There were a few, sporadic large months during Obama’s tenure, and sustaining this level of bullishness may ultimately prove tough for Trump’s presidency.
That said, this recent run is chalked up entirely to consumer and investor confidence. The simple change in leadership is enough to spurn this kind of growth, and it will take a major problem in Trump’s reign to destroy that confidence.
Debt
Another of Obama’s largest claims are how he cut the deficit. Using some interesting math tricks and excluding most of the available data, his administration claims that they cut the deficit by a trillion dollars. In reality, the Obama administration has had a larger deficit each year of operation than the peak deficit under Bush, and in raw dollars, he has nearly outspent every previous president combined.
By the numbers, Obama oversaw the national debt change from $10.6 trillion to $19.9 trillion. Again, in the interest of fairness, it’s important to note that this growth is not exclusively from deficit spending. Interest rates continue to compile, and anyone who has ever lost control of a credit card knows that spending money while piling interest lets things add up very quickly. Still being fair, Obama has maintained record low Fed rates throughout his presidency.
Comparing Trump on this front is challenging, because he hasn’t directly affected the deficit. It’s worth noting that his “drain the swamp” plans could improve efficiency throughout the federal government, and if GDP rises match what has been seen so far, tax revenue gains (even if he wins the tax cuts he proposed) will rise sharply. It’s still speculative, but it will be difficult for even Trump’s most ambitious plans to add to our national debt more than Obama has.
Foreign Policy
Obama’s best claims in this department are how much he was able to reduce the troop counts in Iraq and Afghanistan. In the process he oversaw the collapse of five sovereign allies, pushed Russia and China to the worst relations they’ve had with the U.S. in 30 years and enabled ISIS to carve a huge chunk of territory in the Middle East.
Since Trump was elected, he effectively pushed China to back down on several South China Sea maneuvers, aligned Russia with aims to push ISIS out of Syria and set the stage to move political negotiation into the territory of trade rather than combat. So far, it looks like Trump has done more to earn Obama’s Nobel Peace Prize than the current president.
All in all, it shouldn’t prove to be a difficult legacy to overshadow.
Regards,
Ethan Warrick
Editor
Wealth Authority
