What He Didn't Mention...

Trump Took a Victory Lap. Here's What He Didn't Mention

Some things about the economy got conveniently left out last night.

By MICHAEL GRUNWALD

Almost exactly a year ago, President Donald Trump hosted Harley-Davidson executives at the White House, and credited their success to a new American spirit that had emerged since his election: “I think you’re going to even expand. I know your business is now doing very well.” He later singled out Harley-Davidson as a “great American company” in his first address to Congress, vowing to help it again by persuading foreign countries to cut tariffs on its motorcycles.

But Harley-Davidson did not make Trump’s list of corporations benefiting from his presidency during his State of the Union address Tuesday night. That may be because Tuesday morning, Harley-Davidson announced plans to close a Kansas City factory and lay off 800 employees after weak fourth-quarter earnings, capping off a rough 2017 that saw its worldwide sales drop 6.7 percent. The company’s CEO has said publicly that part of the problem was Trump’s decision to quit the Trans-Pacific Partnership trade deal: “That would have helped us a lot.”

It would be silly to portray Harley-Davidson’s current troubles as a reflection of the economy, which is doing just fine after Trump’s first year in office. But it was even sillier to portray Harley-Davidson’s successes as a reflection of his instant rescue of the economy, which was also doing just fine before Trump took office. He loves to use corporations as props in his own heroic economic narrative, a narrative that depends on national amnesia about the state of the economy he inherited.

“For many years, companies and jobs were only leaving us,” Trump declared last night. “But now they are coming back!”

Um…no. It’s good that the U.S. economy created 2.4 million jobs in the last year, as Trump boasted last night, but it created 16 million jobs in the six years before that. The president provided an inadvertent reminder with his shoutout to Corey Adams, “an all-American worker” whose bosses at Staub Manufacturing in Ohio used their tax cuts to give him a raise. Trump noted that Adams “lost his job during the 2008 recession, and was later hired by Staub,” so he was presumably one of the 16 million who left the unemployment rolls under President Barack Obama.

Similarly, it’s great that the African-American unemployment rate dropped from 7.9 percent to 6.8 percent in 2017, which Trump noted is “the lowest rate ever recorded,” but that was after dropping from 16.1 percent to 7.9 percent since 2009. Trump also hailed how the stock market “has smashed one record after another,” and indeed it has, but it also nearly tripled on Obama’s watch, which doesn’t quite fit Trump’s mythology of America rising from the ashes. Trump even took credit for the resurgence of U.S. auto manufacturing, “something we have not seen for decades.” In fact, Obama inherited an auto industry in shambles, but auto sales and employment nearly doubled on his watch—and have actually declined slightly on Trump’s.

Last night, Trump spent a lot of time advertising that “massive tax cut” he signed last month—and at $1.5 trillion it really is big, although not, as he claimed, the biggest in American history. And it is true, as he said, that 3 million workers have received bonuses that companies like Staub attributed to his corporate tax cuts. But if the point of the legislation had been to get money to workers, the Republicans who wrote it could have just given money to workers. Instead, they poured most of the money into permanent tax relief for corporations and wealthy heirs, while the relief for the middle class was much more modest and temporary.

Those bonuses, of course, will also be temporary, but they gave employers an opportunity to play their beneficent roles in Trump’s economic theater. With great fanfare, AT&T attributed its $1000 employee bonuses to the tax cuts, even though it had been discussing them with its unions for months, then unveiled major layoffs with no fanfare. Wal-Mart paired a $300 million wage increase for its workers with a $4 billion stock buyback for its investors, while also shuttering stores and firing workers. Kimberly-Clark, abandoning the Trump script, actually announced that it would use its tax-cut windfall to shut down factories and lay off 5,000 workers. One consulting firm surveyed 333 large employers about what they planned to do with their tax cuts, and only 7 percent said they were planning any kind of wage increase.

It’s reminiscent of Trump’s early days in office, when he kept touting big expansion plans from companies like Charter Communications, General Motors, and Intel that had been in the works long before he arrived in Washington. Or his post-election public-relations coup when he supposedly saved the jobs at a Carrier plant in Indianapolis from relocating to Mexico; that factory announced 300 layoffs in July and another 200 this month. Obviously, Carrier didn’t fit last night’s New American Moment theme—the Democratic group American Bridge ran digital ads featuring angry Carrier workers accusing Trump of betraying them during the speech—so Trump bragged about Apple instead, crediting its new $350 billion investment strategy to his tax cuts, even though the company has not.

It must be said that Trump misleading his audience about the economy was not exactly playing against type. What seemed unusual last night was Trump boring his audience about the economy. Whatever you thought of his muscular economic nationalism on the campaign trail, with his fiery rants about the nefariousness of China and Mexico and the stupidity of U.S. negotiators, he always put on a good and original show. Last night, most of the policy statements he read off the TelePromter were studiously bland and content-free politician-talk: “From now on, we expect trading relationships to be fair and reciprocal.” Or: “I am asking both parties to come together to give us the safe, fast, reliable modern infrastructure our economy needs and our people deserve.” Perhaps he paid his speechwriters by the cliché.

In fairness, it’s hard to craft an original or indelible State of the Union address. Obama’s annual exhortations about “winning the future” or “an economy built to last” were pretty forgettable, too; the most memorable line in an Obama speech to Congress was “You lie!”—and it wasn’t his. The public quickly forgot the promises Trump made about the economy last year, and last night’s promises probably won’t matter much, either.
But Trump has committed pretty ferociously to his heroic narrative of resurrection. If the stock market or the labor market ever departs too dramatically from that narrative, if the rest of the economy follows the path of Harley-Davidson—well, that might matter.