By now it’s well known that, under the Trump administration, the economic growth rate has increased since the Obama years. Despite his failings , President Trump has actually been a better President (so far) when it comes to business confidence and the economy. But after reading a Forbes contribution article from William Dunkelberg, the chief Economist of the National Federation of Independent Businesses, a major truth immediately hit me. According to Dunkelberg, “On the labor front, the net percent of owners planning to create new jobs averaged 3 percent from 2009-16, compared to an average of 18 percent this year. The net percent of owners expecting higher real sales averaged 1 percent in the 2009-16 period compared to 23 percent this year.”
Interesting points indeed, but after giving it some thought, I’ve come to the conclusion that the “confidence” small businesses seem to believe has more to do with time period and less to do with government policy. It is true that the Trump administration has eased regulation, but I’m willing to bet if you asked the average small business owner how those regulation reductions benefit them, they wouldn’t be able to tell you.
So why are they so confident? Perhaps it’s the new tax cuts that were promised during Trump’s campaign. Again this cannot be the case as (no offense) President Trump has consistently failed to deliver on his bigger campaign promises. Until recently there was no reason to think this would go through after failings on Obamacare repeal, the lack of a Wall being funded, and immigration reform being blocked by the courts.
Yet and still small businesses were confident! Why?
To put it bluntly, it is because of President Obama and President Trump themselves. Obama took office during a terrible recession. Because of this, no matter what he did, Obama would forever be linked by business owners to the Recession. Fair or unfair, this is a fact that goes unnoticed. I believe President Obama could have cut regulation more so than Trump and people would still not have been willing to plan for more business. With Trump, under a new administration, he’s inherited a growing economy, which has made it easier for him to paint the picture that he’s helping the economy grow even if he hasn’t done much to actually do it.
Think about it. Within six months of the Trump administration, America was hitting 3% growth. This is nothing new as Obama hit these numbers in 2015. Yet confidence is up in a way it never was under the Obama administration. Isn’t it odd that when compared, Republicans look at confidence but never actual economic growth? Regardless, these are the truths and should help Trump achieve growth that Obama could only dream, even if the economy is similar from 2015/16 to now.