Thank's Obama...

Everything Is Awesome! Well, Almost.

By almost every measure, America's still on the upswing heading into 2018. Just one thing...

By MICHAEL GRUNWALD

I come bearing good news! The economy is growing!

OK, it’s actually been growing for eight straight years. But as President Donald Trump keeps pointing out, it’s grown at a solid 3 percent annual rate for the past two quarters, “a number nobody thought they’d see for a long period of time.”

OK, OK, the economy actually did hit that 3 percent quarterly growth number eight times during President Barack Obama’s time in office. Nevertheless, it’s a good number. And here are some more good numbers: Unemployment, which dropped from 7.8 percent to 4.8 percent under Obama, has kept dropping to a 17-year low of 4.1 percent under Trump. The Dow, which nearly tripled to nearly 20,000 under Obama, has kept rising to record heights of more than 24,000 under Trump. Inflation and interest rates are still low. Consumer confidence is still high.

In other words, America’s steady upward economic trajectory has continued under an unconventional new president, confounding the liberal pundits who predicted insta-doom. “If the question is when markets will recover,” Paul Krugman wrote the day after Trump’s victory, “a first-pass answer is never.” He was wrong, just like the conservative pundits who kept predicting Zimbabwe-style hyperinflation, Greece-style debt crises, and other economic horrors on Obama’s watch.

For the past three holiday seasons, I’ve documented the failure of those horrors to arrive in my annual Everything Is Awesome essays, which, Lego Movie-inspired headline hyperbole aside, made the cheery case that most things in America were getting better. That case apparently lacked some persuasive power, because Trump won the presidency by making the exact opposite case, arguing that the economy was a disaster and America was going to hell. He was wrong, and quickly began taking credit for the excellence of the economic trends he used to trash on the campaign trail, long before he had done anything to affect them.

This might be hypocritical, but it doesn’t make the trends less excellent. As far as the economy is concerned, just about everything has continued to get better in 2017 at just about the same rate things have gotten better since the Great Recession ended in 2009. Job growth has continued at a slightly slower pace, gross domestic product growth and Wall Street profits at a slightly faster pace, wage growth at approximately the same pace. The trade deficit that Trump has vowed to erase has grown, too, but that’s also a sign of prosperity: It’s growing because Americans have more money to spend on imports. The percentage of Americans who believe the economy is in good shape has also grown, but the partisan breakdown suggests that’s mostly because many Republicans abruptly revised their assessments after Trump took office on January 20.

Trump is one of those Republicans. He used to denounce the monthly Bureau of Labor Statistics job creation reports as “false numbers,” “a complete fraud” and “totally phony,” until the first report during his presidency showed continued job creation. That’s when press secretary Sean Spicer revealed that Trump had told him: “They may have been phony in the past, but it’s very real now.”

Democrats can plausibly try to spin this economic health as the legacy of the Obama economy. At the same time, they ought to ask themselves why they were so reluctant to brag about the Obama economy when it was actually Obama’s economy—and why their presidential candidates felt so compelled to echo gloomy Republican themes of American decline after eight years of economic gains under a Democratic president. In any case, Democrats can’t plausibly argue that Trump has destroyed the economy. It’s still pretty awesome.

There are, however, a few caveats to the awesomeness.

First, while the economy has gotten better for every demographic group and income level since the financial cataclysm of 2008, it isn’t awesome for everyone. The rich have vacuumed up a large share of the recovery’s pre-tax gains, while middle-class income growth has failed to keep pace with the economy overall. Wages have grown faster than inflation—especially for previously unemployed Americans in the 17 million jobs created since the recession ended—but economists are somewhat bewildered why they aren’t growing a lot faster. Globalization and automation are generally positive developments, boosting productivity, efficiency and life-improving innovations, but they do create winners and losers, and opioid-ravaged former mill towns and mining towns have been losing.

Second, a few positive trends have turned negative. The budget deficit, after plummeting by two thirds from 2009 to 2015, has crept up two years in a row, and could explode again now that the Republican tax plan has become law, adding a projected $1.5 trillion in red ink over the next decade. The percentage of Americans without health insurance, which plunged to historic lows under Obama, has also begun to creep up as the Trump administration has discouraged Obamacare enrollment, and could rise further if Trump succeeds in slashing Medicaid funding and Obamacare subsidies. Republicans have also suggested that they may try to cut entitlements like Medicare and Social Security disability insurance to offset the cost of their tax plan, which is expected to reduce the after-tax incomes of some nonwealthy Americans.

Third, economic upswings don’t usually last longer than eight years, and some Trump policies, regardless of their merit, could depress America’s economic output. For example, one component of GDP growth is population growth, and Trump’s proposals to limit legal as well as illegal immigration would translate into fewer people producing fewer things. Similarly, Trump’s aggressively nationalistic trade agenda is designed to promote American manufacturing in the long run, but in the short run could easily reduce foreign investment, disrupt domestic supply chains, or even spark damaging trade wars. The Republican Party’s corporate tax cuts, by contrast, could provide a GDP-friendly economic jolt. But that jolt could be offset by various increases in the same tax plan—and if the Federal Reserve reacts to the plan’s oddly timed fiscal stimulus so late in an expansion by slamming on the monetary brakes.

Oh, there’s one more caveat to the awesomeness of America’s current moment: The economy isn’t everything.

***

The president of the United States has falsely accused our British allies of wiretapping him, called for the imprisonment of his most prominent political opponent, and repeatedly retweeted racists and attacked black athletes. He has told brazen falsehoods about crime statistics, his electoral victory, his legislative record, his health care plans, his tax plans, and so much more. He has lashed out at the mayor of London after a terrorist attack, the mayor of Puerto Rico after a hurricane, judges, the “fake news” media, the FBI, the intelligence community, independent budget analysts, and others who have criticized him or challenged his authority. He has publicly admitted he fired the FBI director for investigating his own campaign and privately urged senators to drop their own Russia investigations. A Republican special counsel has indicted four of his aides, including his campaign chairman and national security adviser, but he’s still dismissing the whole mess as a partisan witch hunt.

None of this is normal. And if you care about democratic norms, not to mention America’s standing in the world, none of this is awesome.

In fairness, none of this is necessarily damaging to the day-to-day quality of life of most Americans. The incessant barrage of oh-no-he-didn’t pouring out of the White House hasn’t crashed the economy, nor has it produced a nuclear war or a debt default or a constitutional crisis. Nor does it seem to be reversing the Obama era’s solid non-economic trends, like plunging oil imports, abortions and teen pregnancies. Dirty coal plants keep shutting down despite Trump’s efforts to prop them up. And no matter what you think of the changes Trump wants to make to health care, federal spending and infrastructure, he hasn’t been able to make them. He hasn’t built his wall, either, but his fiery anti-immigration rhetoric has helped slow the flow of undocumented migrants over the Mexican border to the lowest level since 1971. He signed tax cuts that will mostly help corporations and the wealthiest Americans, but whether or not that’s a good idea, it won’t take effect until next year.

Still, it’s really weird to have a president hanging up on foreign leaders, calling for reporters to be fired, defending neo-Nazis and misleading the public almost every time he speaks. There’s no point pretending these antics aren’t affecting America’s image. A Germany-based market research firm just dropped America’s “nation brand” from No. 1 in the world to No. 6, the only country in the top 10 to fall. A Pew survey of 37 countries found that 35 had a dimmer view of the United States since Trump’s election—all but Vietnam and, of course, Russia. Tourism to the U.S. is down 4 percent this year despite the strong economy, a dip many industry insiders blame on a “Trump slump.”

Of course, a dip in foreign tourism and a tarnishing of the American brand is not the stuff apocalyptic nightmares are made of. If the Trump era ended tomorrow, it would be remembered as a curiosity, a jarring but ultimately inconsequential time. The thing is, the Trump era will not end tomorrow. Republicans used to rail about the uncertainty—usually, the “job-killing uncertainty”—created by Obama’s efforts to reform health care, energy production and financial regulations. Trump has taken uncertainty to a new level, and while it’s definitely possible that his saber-rattling and insult-lobbing and early morning tweeting will turn out fine, he has introduced an element of potential catastrophe into American life that even many Republican politicians who defend him in public readily acknowledge in private.

It’s possible that Trump will fire special counsel Robert Mueller and trigger a constitutional crisis. It’s possible that Trump’s Justice Department really will act on his lie that millions of illegal immigrants voted in 2016, triggering an electoral crisis before the 2020 election. It’s possible that Trump will blunder us into a nuclear war with North Korea or some other foreign conflagration. He has made the unthinkable thinkable, which—if you value peace and stability—isn’t awesome.

Some argue that Trump’s presidency has inadvertently confirmed the awesomeness of America by provoking a popular and institutional backlash. Judges, reporters, “deep state” bureaucrats, investigators and NFL players have continued to do their jobs even though the president has attacked their integrity. Some of Trump’s most extreme aides have been drummed out of their jobs. His approval rating has sunk to historic lows, and his party somehow lost a Senate race in ruby-red Alabama.

That said, the most important institutional check on a president is Congress, and under Republican control Congress has shown little interest in checking Trump. Perhaps that would change if Trump fired Mueller, pardoned Mueller’s targets or crossed some other anti-democratic line, but GOP leaders have given no indication that it would. They don’t want to alienate Trump’s voters, who are also their voters, and they know that crippling Trump would increase their electoral danger in 2018. Most of them are pleased that Trump is putting conservative judges on the bench, attacking Obamacare, and supporting big tax cuts.

In many ways, after all, the Trump era feels fine. There's a cool new iPhone. Celebrities are being supernice to that kid who got bullied in Tennessee. It’s too bad Washington is so dysfunctional that the main federal health insurance program for kids has expired, but Congress will probably renew it soon, and it’s not as if Washington dysfunction is a new phenomenon. A key point of my first three Everything Is Awesome columns was that objective data should outweigh Chicken Little griping, and America’s 2017 data look fine.

And yet: Ugh. The president of the United States insinuated that a television host killed an intern. He tossed off a Native American slur at a ceremony honoring Native American heroes. He still refuses to release his tax returns, even as he pushed a tax plan that is expected to save himself and his kids billions of dollars. He still uses his immense platform to go after Muslims, black activists, Mexicans and Americans who don’t say Merry Christmas. This is still popular with most of his base and his fan club at Fox News, but privately, even Republicans in Washington admit this is not the kind of behavior we expect from our leaders.

Or anyone else, for that matter. Most of us try to teach our kids basic lessons in humanity: Be nice, be honest, be humble. Don’t lash out when things don’t go your way. Don’t call people names. Don’t watch too much TV. Do your homework. Think before you speak. It isn’t all about you. Do what you can to help the less fortunate. Treat everyone of all races and religions with respect. Otherwise, you might end up … in the White House?

The president has more important responsibilities than modeling good behavior. It's really true that the spectacle doesn’t matter as much as the numbers. But while the numbers are still pretty awesome, the spectacle is not. Former General John Kelly was supposed to fix this when he became Trump’s chief of staff. It would be awesome if he got around to that in the new year.

So Happy Holidays—or, if you prefer, Merry Christmas. Maybe there will be more good news in 2018.