Joe Biden Leaves Trump A Horrible Economy; You Should Still Be Optimistic

Now that the election is in the rear-view mirror, the revised economic numbers are looking really grim. 

As shocking as it may seem, the government lied to you! The best economy in human history was, somehow, shedding jobs instead of increasing them. 

Not to mention that inflation rose much faster than expected, putting the lie to the claim that it had been tamed and the future for the American worked looked brighter than ever before. 

Not only did wholesale inflation for Nov come in red hot, but the last 3 months were also revised higher; headline exploded 0.4% M/M, pushing Y/Y to 3.0% while core (pictured here) jumped to 3.4% Y/Y and continues rising much faster than the pre-Jan ’21 average: pic.twitter.com/whyLnc7aXI

— E.J. Antoni, Ph.D. (@RealEJAntoni) December 12, 2024

One thing Joe Biden didn’t lie about, though, is that the American economy was doing better than our peers, but that isn’t because America was doing so hot, but because all Western leaders have been pursuing policies that destroy economic growth, innovation, and improved prosperity for their citizens. 

We may not be getting to Net Zero on carbon emissions, but we are exceeding that goal when it comes to improving living conditions. 

How bad is the economy they’re handing Trump?

The Philly Fed is flagging another 653,000 fake jobs. On top of the 818,000 BLS revised away last year.

Of course left-wing media will blame it all on Trump. pic.twitter.com/8kyPKQGtCW

— Peter St Onge, Ph.D. (@profstonge) December 30, 2024

Still, there is plenty of reason to be optimistic about the changing of the guard in Washington. Interest rates may be high, the national debt may be exploding at rates unimaginable just a few years ago, dysfunction may be reining in Washington, and Trump will be faced with a world in chaos, but I still believe that America is back. 

Given the amount of foreign capital the US is attracting, and the scale of its investment in the future drivers of productivity, competitiveness, and growth, it is likely to continue outperforming other major economies in 2025, predicts @elerianm. https://t.co/tDJsIUHvXS

— Project Syndicate (@ProSyn) December 31, 2024

As impressive as Trump is, he is not a magician. At least, I don’t think he is. But his election has fundamentally changed the game in ways that I believe are still significantly underestimated.

Mohamed A. El-Erian predicts that America will outperform the rest of the world, although he also thinks that a lot of the problems we face will be sticky enough to slow economic growth. In that, I fear he may be right–the policy failures of the past few years have been so devastating that undoing the damage will be a slow and painful process. 

But Trump is flipping the script on Biden’s government-driven “growth” policies that have hampered innovation in the private sector, spurring productivity gains and massive investment flows into the United States–never underestimate the power of optimism and ambition to drive economic growth. 

The past few years of economic policy have created an economy driven by government “investment” and regulation. Carbon reduction, investments in electrifying everything, renewable energy, DEI and ESG as guiding principles of corporate behavior, and focus on nonissues such as “junk fees” diverted resources from productivity gains. 

Productivity and innovation are what drive improvement in our quality of life. Corporations that complied with government priorities did well, as always happens in socialized economies, but growth suffered. 

I predict–maybe I should say I hope for and expect–a boom in investment that will help bring the economy out of the doldrums. Inflation may remain stickier than we like for a while, but cuts in government regulations, the size of bureaucracies, and the promise of a growing economy in the future will attract investment that should serve us well. 

Call it the Trump effect.