The stand out slogan in this past election was, “Make America Great Again.” When Bill Clinton ran against George H.W. Bush it was, “It’s the economy, stupid.” We often judge the success or failure of a president on how well the economy does. That, despite the fact that the president has little to do with the economy. Nothing related to the economy is listed in the president’s duties in the Constitution. The president can’t tell a business how many workers to hire or how many products to make. The economy is under the watchful eye of the House of Representatives but the House is not a controller. Instead, it plays a distant supervisory role.
So, if we are disappointed with the performance of the economy over the next 4 years it won’t be the fault of President Donald Trump. However, if the American public reacts as usual, we will hold our new president responsible for whatever happens, positive or negative, in our business world.
According to history, we may anticipate a recession sometime in the first 24 months of President Trump’s tenure. Statistical models tell us that of the last 70 years we have had a 12-month recession about every 4 years. In our history we have had 124 months of recession since the administration of Harry Truman in the late 1940s, 71 years ago. Seventeen of those months of recession were during times when the nation had a Democrat in the White House. One hundred and seven of those months were when a Republican was president. Thus, from an historical perspective we are six times as likely to have a recession with a Republican in the White House as a Democrat.
So, what factors could affect our economy between now and 2020?
First, our last recession ended 8 years ago. Thus, statistically, we are overdue for an economic adjustment.
Second, as previously stated, recessions occur approximately six times as often during the presidency of a Republican as when a Democrat is in the White House. Some say it is just the bad luck of the normal business cycle. Some blame it on the fact that Republicans tend to slow down the investment of federal monies into projects and programs. No one seems to know for sure.
Third, any one of a number of candidate Trump’s campaign promises could head us into a recession. These include:
— Removing Obamacare and taking insurance support from 23 million people.
— Cutting taxes and significantly increasing the national debt.
— Spending the $5 trillion it will take to renew our infrastructure, including roads, bridges, electrical grids, water and sewer systems.
— Deporting millions of low wage laborers.
One of the important goals shared during this campaign season by the winning candidate was that of doubling our annual Gross National Product from 2 percent to 4 percent. Is that possible? During our last recession our GNP slipped to negative numbers. If the 4 percent goal is reached our economy will be flying high. However, history tells us that every time we reduce taxes and use that artificial means to spur the economy we enter a major national recession again 3 to 5 years later. Thus, “flying high,” may be a mixed blessing.
To summarize, business activity in our country is not under the control of government. Recessions are normal adjustments of the business cycle and history tells us that one is on the way. Like earth tremors help prevent earthquakes, recessions provide the economy an adjustment time for dealing with advancements in technology and other factors and help us ward off events like the great depression of the 1930s. A recession would be bad news for our new administration and it would be, at least temporarily, bad news for the American public.
I have been accused of being a writing Pollyanna, always looking on the bright side. Unfortunately, not today.
— Dr. Mark L. Hopkins writes for More Content Now and the Anderson Independent-Mail in South Carolina. He is past president of colleges and universities in four states. Books by Hopkins currently available on Amazon.com and Barnes & Noble include “Journey to Gettysburg” and “The Wounds of War,” both Civil War-era novels, and “The World As It Was When Jesus Came.” Contact him at email@example.com.