As we begin the 4th quarter of 2018, unemployment is under 4%, taxes are the lowest in memory, and the Dow regularly sets record levels with no sign of a letup. Some people ask, ‘then why do Democrats talk more about the economic recovery accomplishments of the Obama administration than the current one?’

When George W. Bush left office, the ‘Bush boom’ had morphed into the worst global economic crisis since the Great Depression. Foreclosures spiked, the stock market lost 33% of its value, and 3.5 million jobs ended in 2008. Government bailouts rescued General Motors and Chrysler. The new Obama administration saw another 5 million jobs evaporate in 2009 as it pushed an $800 billion stimulus plan through Congress. The economy recovered, slowly. A million jobs were added in 2010, and then at least 2 million in each of the next six years. Both the stock market averages and real number GDP grew steadily from 2010 through 2016, while the unemployment and poverty rates fell.

The Trump administration inherited the mirror opposite of 2009’s wreckage in 2017, most notably six years of robust job growth and a bull market. Its economic team decided to turbocharge growth by cutting regulations and pushing through a $1.5 trillion tax cut. Soon, companies were raising hourly wages, increasing the corporate matches for 401Ks, and issuing one-time bonuses – according to the President, for 3 million workers.

Not everyone cheered. The IMF, Morgan Stanley and Clinton Treasury Secretary Larry Summers argued that the US economy would experience a short-lived ‘sugar high’ that would wear off, leaving a $1 trillion deficit. Other pundits predicted that most of the tax cuts would be redirected into stock buybacks, enriching investors and managers but not creating new jobs for American workers.

The GOP was undeterred. Pointing to a 25% increase in stocks since January 2017 and an increase in take-home pay, congressional Republicans made the strong economy the centerpiece of its midterm election messaging.

But for many reasons, some blatantly partisan, the Democrats have largely ignored the economy in this election cycle. Just as no Republicans saluted the 2009 Democratic Congress’s efforts to jumpstart the economic recovery in 2010, few candidates running against Republicans in 2018 will emphasize the economy’s strength. This is politics-as-usual.

Second, there is a split in the Democratic party. On the one hand, there are the more business-friendly moderates who came up through the DLC. The party leadership is comprised mostly of these lawmakers, who moved the party to the center in the late 1980s in order to raise campaign contributions from corporations. Party leaders are quick to call the current economic boom the latest chapter of a nearly decade-long expansion. Nancy Pelosi said, in August, “You would think everything is good,” with 4.1 percent growth and 3.9 percent unemployment. However, she argues that wages are too low, healthcare costs are too high, and the country did much better under the Obama administration. “If you are going to improve the economy of the country, it’s not about trickle-down economics,” but rather, consumer confidence, Pelosi argues.

Pelosi is vying for control against a new wave of progressives and democratic socialists who emerged in the wake of the Bernie Sanders campaign. When Massachusetts Senator Elizabeth Warren was interviewed in July, she called for a total rollback of the tax cuts. Warren argued, “When the Republicans are saying, “let’s do a $1.5 trillion tax giveaway to billionaires and giant corporations,” Democrats are saying, “whoa, whoa, whoa, if you think there’s $1.5 trillion to spend, let’s invest it in making health care more affordable in America, let’s invest it in fighting back against the opioid crisis, let’s invest it in the infrastructure.”

Warren is the most recognizable spokesman for this wing of the party, but a rising star to Warren’s left is avowed socialist Alexandra Ocasio-Cortez, who is even less tolerant of the President’s economic policies. “New Rule: anyone that was cool with the GOP inventing $2 trillion out of thin air for freebies for people with yachts that have tiny yachts inside doesn’t get to demand how we pay for people who need chemotherapy treatments,” she said in August.

These factions are wrestling for future of the Democratic party. Meanwhile, the Trump boom chugs on.

Sources
https://www.foxbusiness.com/markets/tax-reform-windfall-these-companies-are-hiking-pay-delivering-bonuses

https://www.atr.org/list

https://www.washingtonexaminer.com/boom-164-companies-give-bonuses-lower-fees-to-millions-citing-trump-tax-cuts

https://www.fool.com/slideshow/these-companies-gave-bonuses-or-raises-after-tax-reform/

Study: The Obama Recovery Is A Myth

https://www.politifact.com/truth-o-meter/statements/2018/jan/30/donald-trump/trump-says-tax-bill-led-bonuses-three-million-work/

https://www.washingtonpost.com/news/fact-checker/wp/2017/12/14/comparing-the-trump-economy-to-the-obama-economy/?noredirect=on&utm_term=.f5dfad601da8

https://www.newyorker.com/news/john-cassidy/obamas-economic-record-an-assessment

https://www.britannica.com/topic/Financial-Crisis-of-2008-The-1484264

https://www.marketwatch.com/story/obama-claims-ownership-of-uss-economic-recovery-as-he-blasts-trump-2018-09-07

https://www.washingtonpost.com/opinions/the-economy-is-on-a-sugar-high-and-tax-cuts-wont-help/2017/12/10/6d365950-dc51-11e7-b859-fb0995360725_story.html

https://www.marketwatch.com/story/sugar-high-two-new-reports-say-economic-boost-from-tax-cuts-may-be-fleeting-2018-04-17

https://www.cnbc.com/2018/09/25/trump-tax-cuts-are-not-a-sugar-high-but-multiyear-boost-for-stocks.html

http://www.chicagotribune.com/news/opinion/editorials/ct-edit-pelosi-house-speaker-democrat-20180814-story.html

https://www.cnbc.com/2018/07/23/elizabeth-warren-i-am-a-capitalist-but-markets-need-rules.html

https://www.americanthinker.com/articles/2018/08/ocasiocortez_vs_the_trump_economy.html

https://www.thenation.com/article/the-alexandria-ocasio-cortez-effect/