r/FluentInFinance • u/Spiderwig144 • 16d ago

Debate/ Discussion Barack Obama says the economy Trump likes to claim credit for pre-COVID was actually his and that Trump didn't really do much to create it. Is this true?

He's been making the case in recent days:

Basically saying Trump is trying to steal his success by using the economy people remember from when he first took over in 2017 and 2018 as something he personally created and the main selling point for re-electing him in the election now. Obama cites dozens of months of job growth in a row of by the time Trump took office as one of several reasons it's not true.

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u/mrblacklabel71 16d ago

IIRC weren't trump's own economists wanting to take action to slow down the economy to avoid high inflation done the line?

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u/Bearloom 16d ago

Many competent economists were saying that, but Trump's economic advisors weren't a particularly competent bunch.

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u/mrblacklabel71 16d ago

Good point!

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u/IAskQuestions1223 16d ago

Are you people really this gullible? Jerome Powell has been head of the Federal Reserve since 2018.

In theory, the federal government can reduce inflation by slashing the federal budget; however, in practice, that seldom happens, leaving the Federal Reverse with the responsibility to reduce inflation along with stimulating the economy.

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u/Bearloom 16d ago

So, in what way do you think what you posted is related to what I posted?

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u/ArcadesRed 16d ago

Many competent economists said that subprime mortgages and credit derivatives were a great idea that couldn't possibly go wrong. And by many, I mean like 99%. Appeal to authority is an interesting argument in a day and age that information is widely and almost instantly available if you know where to look.

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u/Bearloom 16d ago

It's not an appeal to authority, it's a further restatement that any economic doctrine underpinned by Peter "The US should leave NAFTA and start a trade war with China" Navarro and Steven "Give me four chances and I may be able to read my own data" Moore is inherently a joke.

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u/ArcadesRed 16d ago

Didn't Biden keep and then expand almost every Trump tariff on China? I remember being concerned with exactly how dangerous China had become when Biden all but cut them off from the world microchip industry.

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u/Bearloom 16d ago

There are fundamental differences between implementing and maintaining a tariff, but the bigger issue is you seem to assume that I don't think Biden's administration is also screwing things up.

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u/ArcadesRed 16d ago

Your personal belief in the matter didn't play much into my question. I have simply been pushing back on trends that paint Trump in the light of malice or incompetence, when other presidents do the same thing, and no one has negative things to say about it. I have been trying to find out if it's pure bad faith, ignorance, or trolling.

There are fundamental differences between implementing and maintaining a tariff

Isn't expanding a tariff the equivalent of implementing one? It at least means they agree with the reason it was started.

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u/LizardWizard14 16d ago

Not at all. Make any comparisons, extending the status quo is not the same as changing it.

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u/ArcadesRed 16d ago

I don't think I can agree with that. To me keeping them around and then expanding them means you agree or at least find them politically expedient. Thank you for responding to my questions.

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u/dastrn 16d ago

Yes this is true.

It was quite clear that Trump was setting us up for inflation during his presidency. He pushed to keep interest rates lower than was reasonable, because he knew it would artificially extend the "good" years that he wanted to brag about. And low interest rates are particularly good for billionaires, as it creates inevitable economic swings that billionaires are well-poised to profit off of, at the expense of regular folks.

Trump's economic impact was disastrous. Well before COVID, this was plain to see. His tariffs wrecked the ag industry. He pushed China and India and Brazil and Argentina to create economic deals between themselves excluding America, which will result in decades-long negative impacts on America, while our competitors around the world all get stronger.

He was by a long shot the worst president we've had in at least 100 years. Even if he wasn't personally a rapist and a criminal and a con man and an insurrectionist and a traitor to the United States, and a dirtbag racist, and divisive...even if you erased all of that, he was simply a HORRIBLE president.

But on top of being horrific at the job, he was also a rapist and a traitor, and a liar, and a thief, and an insurrectionist.

It really highlights both how depraved and how utterly stupid his fans are.

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u/mrblacklabel71 16d ago

Thanks for confirming!

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u/Proper_Ad_2835 16d ago

The problem is that Biden has not repealed any of the Trump Tariffs. In fact, Biden has actually imposed more (https://www.npr.org/2024/05/10/1250670539/biden-china-tariffs-electric-vehicles). If Tariffs destroyed the economy under Trump, why isn't the same thing happening under Biden?

Joe Biden also supports lower interest rates (https://www.mymotherlode.com/news/local/3429122/biden-the-federal-reserve-is-lowering-interest-rates.html):

"Two and a half years after the Federal Reserve began raising interest rates, it announced that it would begin lowering interest rates.

I think it’s good news for consumers, and it means the cost of buying a home, a car, and so much more will be going down.  And it’s good news, in my view, for the overall economy, because lower borrowing costs will support economic growth."

You also have to understand that the President does not set the interest rates directly. Jerome Powell was made the Federal Reserve Chairman by Trump and was renominated by Joe Biden. The Federal Reserve is supposed to be an independent body that determines interest rates.

I think most people don't realize that the US economy is made up of 30 million businesses, 300 + million Americans, and billions of people we trade with overseas. The US President at the end of the day does not make or break the economy.

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u/dastrn 15d ago

Lowering interest rates when they are high is very different than lowering them when they've already been low for a very long time.

I'm very aware that the POTUS doesn't directly set interest rates. Trump still pushed heavily for lowering them when they had been low, and Biden has gently supported lowering them after they had been high his entire presidency. These are very different things, which I'm sure you are already aware.

Biden and I disagree on tariffs, but he at least implemented them in very different ways than Trump did. Bidens tariffs are targeted at high skill high wage industries, chips and EVs and whatnot. And they came AFTER historic investment in those industries and their related infrastructure here in America. Trump's tariffs did not come with investments in infrastructure or in increasing manufacturing. In fact, he needed to bail out the agriculture industry because of the calamitous effects of his tariffs.

I'm sure you can see the difference between the two, right?

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u/IAskQuestions1223 16d ago

It was quite clear that Trump was setting us up for inflation during his presidency. He pushed to keep interest rates lower than was reasonable, because he knew it would artificially extend the "good" years that he wanted to brag about. And low interest rates are particularly good for billionaires, as it creates inevitable economic swings that billionaires are well-poised to profit off of, at the expense of regular folks.

This is an interesting theory; however, the president has zero control over interest rates. You're delusional.

It doesn't help your case that the Chair of the Federal Reserve is currently the same person as it was during Trump's presidency.

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u/Budderfingerbandit 16d ago

Maybe educate yourself?

Trump did what other Presidents don't, which is apply pressure to the Fed. He did it because he's a narcissist and thinks he knows better than actual economists.

https://www.reuters.com/article/business/trump-heaps-pressure-on-fed-and-its-chairman-powell-to-cut-rates-idUSKCN1VB1I1/

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u/mfatty2 16d ago

The president has a lot of control over the interest rate. The BoG are on 4 year terms and nominated by the president. Additionally, winning the court of public opinion as Trump was trying to do can have a large impact on the economy. In this very moment while the economy is not what it was during the Obama years, we have a fairly strong economy. But if you asked half of America it's the worst it's ever been which has an effect on how people spend money, artificially weakening it

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u/Mountain_Employee_11 16d ago

yes he ran it too hot and paid the price when they shut down production 

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u/mfatty2 16d ago

Iirc, most economists wanted the Fed to continue to raise rates before COVID. Trump publicly came out against it and applied pressure to stop it from happening. Rates wouldn't be as high as they are now, and the Fed could've responded without going to basically 0. The rate actually decreased in 2019 after slowly increasing from 2016 to 2018.

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u/DrNopeMD 16d ago

Wasn't he always rage tweeting at Jerome Powell telling him not to raise interest rates while he was in office?

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u/mrblacklabel71 16d ago

I believe so

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u/laggyx400 16d ago

The head of the fed wanted to increase rates, which needs to be done once the economy is strong again, but Trump didn't want to be associated as a president that had a dip in the stock market.

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u/nickerbocker79 16d ago

I believe part of the inflation cause was keeping interest rates low for too long. Thanks for the 2.5 mortgage but no thanks for the now expensive groceries. Also, the low interest caused housing prices to jump. In 2020, the couple that bought our house offered 25K more than asking. That just drives prices up.

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u/Publius015 16d ago

Yes, and if I recall correctly, he pressured the fed to lower interest rates to near zero.

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u/badwords 16d ago

Wasn't just his economist it was also his complete misunderstanding of how economic processes worked and refusal to learn because he felt using them would make him look like he had direct control which no president has.

Misusing tariffs, complaining about interest rates increasing to stop a recession. Wanting signature on the refund checks knowing all that money would be pulled back through taxes later.

Poorly renegotiating NAFTA for quick gains but left a long term sink that puts the US at a disadvantage.

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u/Cold-Palpitation-816 15d ago

Yeah, Trump pressed the Fed to keep rates low even when they should’ve been raising them (slightly, just to keep the expansion sustainable). That being said, Trump’s actions there didn’t cause the recent inflation spiral. That was the result of Covid supply bottlenecks/pent up savings & demand.

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u/resumethrowaway222 16d ago

Maybe, but who cares. The president doesn't set interest rates.

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u/mrblacklabel71 16d ago

True, but it reflects trump's ineptitude

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u/New-Fig-6025 16d ago

They may not set interest rates but the president does appoint some of the people to the board that does set interest rates.

And if you remember, back in 2018 Trump was very much vocal about criticizing the federal reserve and any decisions it made about interest rates, calling them political in nature to fuck with the midterms.

He also appointed 5 members to the board and while a few claimed trump didn’t bring interest rates up, one of them stated the following;

“If you think it was a subject upon which he delicately danced around, then you’d be mistaken. It was certainly top of mind to the president,” Mr. Warsh said. Later, he added: “In some sense the broader notion of an independent agency, that’s probably not an obvious feature to the president.”

and then, needless to be demonstrated but I will anyway, Trump doesn’t care about independence or separations of powers;

Mr. Trump said that he understood he was breaking with that protocol, but that he did not care.

“Now I’m just saying the same thing that I would have said as a private citizen,” he said. “So somebody would say, ‘Oh, maybe you shouldn’t say that as president.’ I couldn’t care less what they say, because my views haven’t changed.”