Right wing mythology is effective, pervasive and persuasive. It is also largely malarkey. Today I’d like to dispel the myth that Republicans are better for the economy. They have not been in my grandfather’s, father’s nor my time.
The combination of Republicans Herbert Hoover and to a somewhat lesser degree Calvin Coolidge brought us the Great Depression. Democrat Franklin D. Roosevelt rescued us from it. Republican George W. Bush’s administration concluded with the commencement of the Great Recession. His Democratic successor, Barack Obama, got us out of it. Donald Trump’s incompetent handling of the pandemic stalled the robust and recovering economy that he inherited from Obama. Despite a largely hostile Congress and Fed, Democrat Joe Biden has led us to a recovery beyond any realistic economic expectations. Now, I ask you which party is better for the economy?
The only viable candidates in 2024 will be the Democratic and Republican nominees. You can talk all you want about “third party” candidates – and there will be plenty of them – but they have no chance of emerging victorious. It is still a bit early but it looks like a rematch of Biden and Trump. Let’s look at Trump’s economic performance just a bit deeper.
Under Trump the economy needed three stimulus boosts which drove up the national debt. Before the right wingers get all exercised, I will admit that the last round actually was authorized and disbursed under Biden but the simple fact is that it was necessitated by Trump’s economic mismanagement. When the shortstop throws a ball in the dirt and the firstbaseman can’t scoop it up the error is charged to the shortstop because of his errant throw, not the firstbaseman.
Now let’s take a look at the Fed. In January of 2017 when Trump took over from Obama the effective Fed rate was 1.33%. When he left office in January of 2021 it was 0.09%. Today, under Biden, it stands at 5.33%. In other words, the Fed did everything it could to help Trump and is trying to pour cold water on Biden.
Most Americans, certainly most younger ones with families, are net borrowers so higher rates hit them at the kitchen table. Next time you have to say “No” to your kids think about the Fed.
It’s been decades but my first real job was in banking. You can take the boy out of the bank but it’s unlikely you will take the bank out of the boy. Businesses, especially young or expanding ones require loans or other financing. The higher the base rates the lower the net profit. A loan that may be doable at a rate of X often is not doable at a rate of X+. It is that simple. When the business goes under or cannot expand job growth and with it things like feeding your family and keeping a roof over its head don’t happen.
History tells us that most of us are economically much better off under a Democrat. If the 2024 rematch of 2020 materializes the answer is even clearer. Biden had done a good job; Trump not so much.
Myth dispelled, my mission for today is accomplished.
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