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The economy is strong, as Trump says. But at what cost?



One question is whether Mr. Trump’s policies deserve the credit he axiomatically takes for the economy. On that point, the answer is mixed at best: Economic growth under President Obama after the Great Recession ended in 2009 averaged 2.2 percent annually, so Mr. Trump’s 2.5 percent annual average is a modest improvement over what he inherited, partially attributable to Federal Reserve policy — and partially to the stimulus from the hundreds of billions of dollars in tax cuts Mr. Trump’s policies created over the past two years. At the same time, the Trump tariff wars with China, Canada, Mexico, South Korea, Japan and Europe (did we miss anyone?) generated countervailing uncertainty that slowed growth. Also, the tax cuts, heavily weighted toward businesses and the well-to-do, probably exacerbated after-tax income inequality, notwithstanding the wage increases among lower-income workers Mr. Trump touts as a “blue-collar boom.”

More consequential is whether the current prosperity has been built on a sustainable basis. Again, the jury is out: Mr. Trump’s corporate tax-rate cut represents a structural change in favor of investment that even many Democrats advocated, albeit not to the degree Republicans have enacted. Nevertheless, productivity growth rates remain stubbornly sluggish, and Mr. Trump has failed to deliver on his promises of major new infrastructure spending, which might have enhanced the economy’s growth capacity. The sheer growth of the labor force is another key factor in economic dynamism, but Mr. Trump’s anti-immigration stance works against that, too.

Finally, even if the economy were performing as well as Mr. Trump says, and even if he deserved all the credit, this unsettling question would remain: At what price? The president, of course, has not only changed economic policy since 2017; he has tried to change the presidency — from a focal point of national unity to a bully pulpit for partisan and personal rancor, up to and including the search for foreign-dug dirt on a political rival for which he faces an impeachment trial in the Senate. Mr. Trump overtly asserts his total innocence in all respects, even as he implicitly tempts Americans with a subtly different proposition: to accept his behavior, and his conscious efforts to divide the country, as somehow necessary trade-offs for prosperity. This is as false as it is Faustian; trust and consensus are essential ingredients of a modern, efficient economy, not to mention indispensable to a thriving, durable Union.

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