President Biden by the Numbers (After Trump by the Numbers)
MY ESOTERIC likes to think of himself as a bit of a polymath with degrees in Statistics, Accounting, Computer Science, & Operations Research
White House
We Have A New President
So I will continue with this set of metrics to track how well or poorly President Joe Biden transitions America from the rather weak state it was left in by Donald Trump and the Covid-19 pandemic.
Final Trump Update
This is the final update for Trump by the Numbers. Most of the charts have his end of term data; a few still have the data still coming in.
Because of the pandemic, virtually all of the metrics we are considering went south. Because of the overall poor way Donald Trump handle the coronavirus, many of the results remain worse than they probably should. That said, in several important areas were in trouble before the pandemic hit while there were a few bright spots that remained, even through the pandemic.
We will discuss each.
How Do We Stand Today?
Below is what is called a stoplight chart. It is intended depict in one place an easy to read picture of the status of a complex set of data; in this case Trump's America. Beside each measure, e.g. GDP, are a pair of colored circles ... the stoplights.
Below is a stoplight chart for the end of President Obama's term of office. This is what the charts tell me about the state of America at that point in time. The colored circles represent the "goodness" of that measure. For example:
- Food Stamp Use is Yellow (poor). While food stamp use declined considerably after the Great Recession of 2008 during President Obama's term in office, it was (and still is) way above historic norms.
- On the other hand, the Unemployment Rate is Blue (great) because at 4.8%, the economy is near or at full employment and is below what is normal.
- Finally, the National Debt is Red (terrible) because, even though the huge increase in debt was the direct result of 1) the cumulative effect of President Bush's tax cuts and the cost of his wars, 2) automatic economic stabilization measures that kicked in with the recession, and 3) the measures President Obama was forced to take to avert a depression, it is nevertheless historically high.
You will see I take a slightly different approach when we get to President Trump's stoplight chart.
President Trump's Final Stoplight Chart
We use this management tool a little differently in assessing how President Trump is doing. Instead of looking at how he is doing overall at single points in time, we consider how he is doing relative to how President Obama did. Why this way? Because President Trump and his supporters have made it very clear in words and deeds that they are measuring themselves to Obama's legacy.
Consequently, I organized this chart thusly. There are two sets of stoplights. Both measure whether he is doing better or worse than President Obama for each metric. The one on the left depicts how things stand about ten months into President Trump's term. The right stoplight is how it is in December 2017. The difference between the two colors tells you where that particular attribute is heading. The totality of color changes (or lack thereof) gives you a good idea of how President Trump is doing overall when compared to President Obama's ending position.
For example, take the Dow Jones Industrial Average. I have it rated Blue because Trump is doing much better at the moment than where Obama left it. Likewise, GDP is rated Green because the trajectory of GDP growth has not changed very much between the two administrations. Auto sales are Yellow because they are a little worse than what Obama gave him. Finally, Uninsured Rates is Red because all the turmoil surrounding Obamacare has noticeably increased the number of uninsured Americans.
Stoplight Chart on Trump's America
CHART 2 - President Trump's Stoplight Chart - Aug 6, 2020
MY ESOTERIC
A Little History
To put things in perspective, a little historical context is always helpful. This next series of charts provide a look at Public Debt, Debt to GDP ratio, GDP and Per Capita GDP over various periods of time starting with a look at the entire history of the United States.
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The first set of charts provide a look at Public Debt as well as the more meaningful Public Debt to GDP Ratio. The reason for the second metric is that it is not very often that a raw number (Public Debt) has any meaning by itself. It is just a number such as the Right throwing around 20 Trillion Dollars as if that was a terrible thing. Well it may be or it may not be. And you won't know until you measure it against some other related metric(s); in this case GDP and Time.
Until you know the size of the economy can you gauge whether $20 trillion is large or small. Because GDP is also around $20 trillion then you can start getting the feeling that the current public debt is pretty big indeed, since it is around 100% of GDP (in other words, it would take the entire American economy to pay off what America owes to itself and others).
Even here, you still don't know if this is situation is "normal" or not until you see what it was in previous years. Again, you can see it is at an all time high (save for WW II). The final piece of context that is helpful is looking back in history at other periods where the Debt-GDP ration was this high and judge if the times were good or bad then. We can't do that here because this is a unique situation in a peace-time economy. So, my conclusion in this case is having a debt this high is not good for economic health.
Final Analysis For Trump
Donald Trump oversaw a massive increase in Public Debt during his four years in office as well as an historic increase in the Debt to GDP ratio at 130.8%. True, only once in modern American history has the Public Debt actually gone down in terms of constant dollars, that was at the end of President Clinton's term. But the increase in Public Debt under Trump didn't have to be so large.
There are three reasons for this historic growth.
- the tax cut early in his term.
- the pandemic
- Trump's mishandling of the pandemic
The 2017 tax cut primarily impacted large corporations and the rich to very rich. As most tax cuts are, this one was touted to increase GDP over the long-term and therefore tax revenues to offset the reduced tax rates. As any student of history knows, this rarely is the case - and it wasn't here either. As often happens, tax revenues plummeted thereby pushing up Public Debt well above what it would otherwise have been. Because GDP growth stayed relatively flat as well, the Debt-GDP rapidly rose.
Not under Trump's control was the initial impact on the economy by the coronavirus pandemic. As would be expected, it caused a massive recession further driving down tax revenues as well as GDP while, at the same time, driving an historic increase in public assistance payments, adding greatly to the Public Debt.
Donald Trump's poor response to the pandemic has probably contributed to the size of the Public Debt. Trump purposefully 1) downplayed the dangerousness of the virus, 2) made war against the wearing of face masks, the best defense against transmitting the virus, and 3) poo-pawed the need for social distancing, the next best thing to reduce the transmission of disease. The result was a poorer response by the public to doing the necessary things to mitigate the spread of the virus. Consequently, in the early Summer and then again in late Fall and early Winter, case counts, hospitalizations, and death due to Covid exploded. The consequence was foreseeable - more people out of work and more need for assistance pushing up Public Debt even further.
President Biden Takes His Shot
Having federalized the response to Covid vaccination, the economy is able to return back to normal on a faster trajectory than what Donald Trump left us. One potential benefit to that is, at first blush, GDP is growing faster than the Debt which is leading to that tiny downturn in the Debt to GDP ration.
Unfortunately, the Debt itself must continue to grow as America digs its way out of the Covid Recession.
CHART PD - 1:
This next set of charts looks at the Debt and Debt-GDP ratio in more detail by taking shorter snapshots in time. Here, to add context, I show some major events that drove changes to public debt. Then, by looking at an even shorter time frame, we can analyze public debt in yet another way—by seeing how it changed from administration to administration and comparing it to the rhetoric of the day.
In that last regard, much has been made of how much President Obama has driven up public debt. Well, you can see from Chart PD-3, that is not really the case because after you get past the terrible effects of the Great 2008 Recession (Obama took office in 2009 and was able to have direct influence on the 2010 budgets and beyond), you see that Obama, at 2.7%, has the second lowest rate of debt growth of the four presidents before him. So when you hear the hyperbolic rhetoric on this subject, you now know what the truth is.
CHART PD - 3:
The Scariest Chart You Will Ever See
Chart POP-1 is a bombshell for anybody who cares about a growing American economy. It says that if something doesn't change regarding population growth then the future for sustained economic growth is bleak. And, that is not the hyperbole mentioned above.
It is a simple chart for sure, just one line heading south, but what a line it is!! You see, as I explain in other articles, economic growth is intimately intertwined with population growth (plus productivity growth). In the mid- to long-term, economic (GDP) growth is basically equal to the population growth rate plus the productivity growth rate1 plus an error factor that reflects current pressures on the economy. It is no more complicated than that.
Yes, in the short-term other factors (the error term) hold sway which cause monthly, quarterly, and yearly variations in GDP; things like the business cycle and inflation. But after they run their course, what happens with population (creates demand) and productivity (ability to satisfy the demand) take over control.
Without getting into the nitty-gritty of why, what must happen to keep the population stable, not increasing or decreasing (like Russia is) is that, on average, each female must produce two offspring during her lifetime in order to replace her and the father. If that doesn't happen, then population (and therefore demand) must decrease over time. Consequently, in order to grow the population one of two things must happen (or a combination of the two); 1) more than two offspring must be produced and/or 2) immigrants (it doesn't make any difference which type) must come into the country. There is no other way.
Look at the note in the middle of the chart pointing to the line at about the 2009 point. It is in this period when native born births fell below the replacement level or 2.08 births per woman. Therefore, it was here when immigration became critical to a growing population because immigration is necessary to replace the babies that aren't being born in sufficient numbers. To put it bluntly, around 2009, the US population started falling. The only reason it is growing now is all the immigrants that arrive and stay in America. Yet that is exactly what President Trump and many other conservatives are trying to stop from happening.
The reason I introduced you to this concept is to keep everything else that follows in context.
1 Today that would be .72% plus 1.2% = 1.97% predicted annual long-term growth. Since the Great 2008 Recession the economy has grown at roughly 2%. For comparison, population growth for the 1990s was around 1.2% and productivity growth was 2.2%. So GDP growth should be around 3.4%. In fact, it was about 3.8%.
Population Growth Rate - The Key to Economic Growth.
The History of GDP
Let's look at Gross Domestic Product (GDP), it is explained a little later. But just let me say it is a 20,000 foot view of how well the economy is doing. If it is growing, the economy is good, if it is flat, then the economy is under-performing, and if it is decreasing, the economy is in recession. The first chart looks at the whole history of GDP, from 1794 to 2017. In this, and the charts that follow showing finer and finer detail of GDP, I suspect most of you are in for a shock.
The most popular myth held by our conservative friends is that the economy was much better, relatively speaking, than it is today. If you believe that, get ready to have your bubble burst. You see, included on each chart are the major recessions, depressions, and panics that have marred our growth and caused unimaginable suffering and hardship on all but the wealthiest Americans.
The bottom line is that after the Great Depression of 1929 and until the Great Recession of 2008, the quantity and severity of recessions were small by comparison to what came before them. Before 1929, it seems that every time you turned around, America was in another major economic downturn. It is rather "depressing" when you think how one side of the political spectrum paints what has been a pretty good run of prosperity from 1950 to 2007 and 2010 to 2019.
Of course this came to a screeching halt with the 2020 recession, a natural consequence of the pandemic.
Final Analysis
Donald Trump made large promises about how well he was going to do vis-á-vis the GDP. At one point he promised -
“We're bringing it (the GDP) from 1 percent up to 4 percent. And I actually think we can go higher than 4 percent. I think you can go to 5 percent or 6 percent.”
Even now he is telling anybody who will listen he produced the best economy America has ever seen. Well, the fact is, and the charts below show it, he didn't. He didn't even come close. His only truthful claim is that his GDP growth was marginally better than President Obama's - which he panned as disastrously.
The reality is, the rate of GDP growth which Obama and Trump sustained is probably the best of all worlds. History shows us that the types of growth Trump and the Republicans wanted lead to boom-bust cycles with the "busts" being pretty disastrously. It can be empirically shown that annual GDP growth in the range of 2.5% to 3% lead to very long periods of good economic growth
Trump by the Numbers
The following set of charts and graphs will describe the ups and downs of Trump's America over the length of his term. He has made many promises regarding how well various sectors of the economy will do, e.g., huge increases in coal jobs.
What this article is about, then, is presenting and discussing data that tells us how well he is reaching his goals. Almost all of the data comes from official government sources although a few things such as consumer sentiment come from non-government but nevertheless industry-trusted reports. The sources will be provided.
The charts and graphs will be organized in what I hope are logical groups, starting with Gross Domestic Product (GDP), a general measure of the health of the economy, Included with the GDP are other related measures that provide more insight.
Economic Indicators
Gross Domestic Product
The most common indicator of economic health is the Gross Domestic Product (GDP) and how it is changing over time. The GDP measures the value of all of the services and end products manufactured in the US. It may seem so, but not coincidentally, this is the same value of all of the wages and taxes paid plus profit earned in the US.
GDP is related to recessions (and depressions) in that the National Bureau of Economic Research (NBER) uses it to determine when the economy is in recession. As a rule-of-thumb if GDP goes negative for two quarters in a row, the economy is in a recession. So Chart GDP-1 is our first gross indicator of Trump's America because we have three quarters under Trump's leadership.
What do we see? Basically no change (therefore a Green stoplight) from the path President Obama charted although if the last two quarters continues (over 3% in both the 2nd and 3rd quarters), he may soon be outperforming Obama.
GDP Components
The next level of detail is look beneath the gross GDP numbers. The GDP is calculated by adding the value of: