Hmmm. What should President Trump talk about when he delivers his State of the Union speech to Congress on the night of February 4?
The embarrassing impeachment ordeal will probably be off-limits, since it would make no sense for Trump to refer to accusations of criminality before a prime-time audience. Instead, like other presidents, Trump will probably try to highlight accomplishments during his three years in office—especially in the economy, which is solid and could help Trump’s reelection bid.
Trump can legitimately claim the economy is doing well. We’re in the 11th year of the longest expansion on record. Unemployment is at a 50-year low. Stocks are close to record highs. And there’s no hint of recession.
Yet Trump seems unable to resist lies and exaggerations. When he gave a speech on the economy in November, Yahoo Finance tallied 22 glaring lies on trade, jobs, interest rates, wages and Trump’s record compared with President Obama’s. His main thrust seemed to be taking credit for economic developments that were likely to happen anyway. If the pattern holds, Trump will probably repeat some of those lies in his State of the Union address. Here are some whoppers to watch for:
Under Obama, 5 million people left the labor force. In Obama’s first month in office, the labor force was 154.2 million. In Obama’s last month, the labor force was 159.7 million. That’s a gain of 5.5 million, not a loss.
“In 2016, the Department of Labor predicted that Americans would continue dropping out of the workforce in record numbers.” No, it didn’t. It predicted the labor force would rise from 156 million in 2016 to 168 million by 2026. Trump also distorts Labor Dept. projections for the unemployment rate, which it saw falling to 4.7% by 2026.
The Federal Reserve under Trump has executed a “near record number of rate increases.” Not even close. The Fed has raised interest rates 7 times during the Trump presidency, a quarter point each time. From 2004 to 2006, the Fed hiked rates 17 times. During the 1970s, the Fed raised short-term rates for seven straight years, from 4.65% to 19.85%.
“We have added nearly $10 trillion of value to our economy.” GDP was $19.2 trillion when Trump took office, and it’s $21.7 trillion now. That’s a gain of $2.5 trillion, not $10 trillion.
“Under my administration, [median income] rose $5,000.” Census data shows median household incomes have risen from $62,626 to $63,179 since Trump has been in office. That’s just $553. The data ends in 2018, but another 11 months won’t account for that extra $4,447 Trump tossed in.
The average household is $10,000 richer under Trump. He gets this figure by starting with the $5,000 in income gains he’s inflated by a factor of 10, then making similarly gassy claims about savings from tax cuts, deregulation and “energy cuts,” whatever that means. Nobody can come close to substantiating this figure, and ordinary people can fact-check that by looking around for their own magical $10,000 windfall.
The 2017 tax cut was the largest in U.S. history. As a percentage of GDP, it’s more like 8th largest.
“Our regulatory rollback is also leading to major price reductions in health care and prescription drugs.” Health care costs have risen 7.5% since Trump took office, according to Census Bureau data. Drug costs are up 2.8%.
“On the WTO, we’re winning cases for the first time.” It’s not the first time. The United States has historically won more than 90% of the cases it brings before the World Trade Organization. It also loses the majority of cases other countries bring against it.
“There are certain countries that the average tariff is 100%.” According to the World Bank, Palau has the world’s highest average tariff on imports, at 29.9%. Only three countries, including St. Kitts and Bermuda, impose import tariffs above 20%.
“We’re taking in billions and billions of dollars in tariffs that China is paying for.” American importers and businesses are paying the tariffs, not China. The tally so far is about $75 billion in new taxes on businesses on an annualized basis, according to the American Action Forum. This may be Trump’s most prolific economic lie—he’s told it at least 100 times, according to a Yahoo Finance tally.
We have a $500 billion trade deficit with China. This is a Trump classic that refers only to the trade deficit in goods with China, as if services such as insurance and tourism aren’t part of the real economy. The deficit in both goods and services in 2019 was $379 billion.
Obama’s trade deal with South Korea killed 250,000 U.S. jobs. Congressional researchers think that deal probably had little impact on U.S. employment.
Thirty percent of U.S. auto production moved to Mexico during the last 20 years. Imported cars from Mexico only account for 14% of U.S. auto sales today. So this can’t be true.
“We’ll have a trade deficit of … close to $800 billion. Who ever heard of this?” Literally nobody ever heard of this. The U.S. trade deficit in 2018 was $628 billion. Again, Trump is mentioning only the trade balance in goods, which is bigger. The U.S. is a net exporter of services, which lowers the trade deficit.
Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. Confidential tip line: [email protected]. Encrypted communication available. Click here to get Rick’s stories by email.
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