In Davos Speech, Trump Mixes Facts With Fiction
Posted January 26, 2018 7:32 p.m. EST
WASHINGTON — In a speech Friday to world and financial leaders at the World Economic Forum in Davos, Switzerland, President Donald Trump mixed facts, falsehoods and claims that could use context.
Below are some statements from the speech about the economy and Trump’s place in history.
— Trump’s accurate claim of 2.4 million jobs added “since my election” requires more context.
The economy has added almost 2.4 million jobs in the 14 months since Trump was elected in November 2016 — but it is worth noting this number includes the last three months of Barack Obama’s presidency.
Also, as a point of comparison, the economy added 2.8 million jobs in the 14 months before Trump’s election.
During the first 11 full months of Trump’s presidency, 1.8 million jobs were added. And in the 11 months before he was inaugurated, 2.1 million jobs were added.
It is also debatable whether Trump, or any first-year president, can take full credit for a strong economy (or be censured, were it to happen, for weak economic performance). As my colleague Neil Irwin has explained: “If you think the economy is driven by concrete, specific policies around taxes, spending, monetary policy and regulation, the answer is no. If you think that what really matters is the mood in the executive suite, then just maybe.”
— Trump falsely claimed that his tax cuts, which he called “the most significant in history,” were the first “in close to 40 years.”
The $1.5 trillion tax cut enacted in December does not amount to the largest in history, nor is Trump the first president to pass tax cuts since President Ronald Reagan.
President Bill Clinton signed the Taxpayer Relief Act of 1997. President George W. Bush enacted two major tax cuts in 2001 and 2003. The stimulus passed under President Barack Obama included hundreds of billions of dollars in tax cuts, and Obama later extended the Bush tax cuts with the American Taxpayer Relief Act of 2012.
Reagan’s 1981 tax cut, Obama’s stimulus package and extensions of Bush’s tax cuts would all place ahead of Trump’s tax cut as a share of the economy and in inflation-adjusted dollars.
— Trump’s claim that “there’s never really been a businessman or businessperson elected president” is wrong.
Several presidents have owned, operated or worked in the field of business.
Most immediately, George H.W Bush and George W. Bush both owned several oil companies based out of Texas. The latter was also part of an ownership group that purchased the Texas Rangers baseball team. Jimmy Carter owned a peanut farm and some other real estate in Georgia.
Herbert Hoover became wealthy after founding a mining engineer consultancy. Warren Harding was the owner and publisher of a newspaper. Calvin Coolidge worked for a bank. Teddy Roosevelt owned and operated a ranch in the Dakotas Territory.
Looking further back, George Washington, James Madison and James Monroe all owned plantations.
— Trump’s claims about minority unemployment levels could use some context.
Trump is right that the unemployment rates for women and minorities are at or near historic lows. But it’s worth noting that these rates had been steadily declining for years by the time he took office.
For black Americans, the unemployment rate of 6.8 percent in December was the lowest ever recorded, according to the latest monthly data that is available from the Bureau of Labor Statistics. It had already decreased to 7.8 percent in January 2017 from over 15 percent in 2010.
The December figures also do not reflect a significantly different racial unemployment gap. The black unemployment rate has consistently been double that of the white unemployment rate, and remained at that level in December.
The Latino unemployment rate declined from 5.9 percent in January 2017 to 4.9 percent in December, the second lowest — not the lowest, as Trump said — on record. It reached 4.8 percent in June, October and November 2017, as well as in October 2006 under Bush.
The 4.0 percent unemployment rate for women in December is among the lowest in 17 years, as Trump said. It was lower in October at 3.9 percent, down from 4.8 percent in January 2017.
— Trump is right when he says that the stock market has “added more than $7 trillion in new wealth since my election.” But the gains are not widely shared.
Trump is most likely referring to the rise in the Wilshire 5000 Index, a widely used metric. The index grew to 29,431.74 on Wednesday, from 22,165.78 points on Election Day 2016, according to the Federal Reserve Bank of St. Louis, a gain of more than 7,200 points. A single point on the index represents $1.15 billion, so the market has added $8.3 trillion since Trump’s election.
But these gains in wealth have disproportionally benefited Americans by income bracket. Roughly half of Americans do not own stock directly or in retirement accounts and mutual funds, and the richest 10 percent of households controlled 84 percent of the total value of stocks, a recent study by the nonpartisan National Bureau of Economic Research estimated.
Buoyed by stock market growth, net household wealth increased to $96.9 trillion in the third quarter of 2017 from $91.7 trillion in the last quarter of 2016, according to the latest data available from the Federal Reserve.
— Trump is right that coalition forces have “retaken almost 100 percent of the territory” once held by the Islamic State, part of which occurred under Obama.
Pentagon officials have recently declared the defeat of the physical “caliphate” and said the Islamic State has lost nearly all of its territory in Iraq and Syria.
At its peak in January 2015, the jihadi group controlled 35,000 square miles of territory in the Middle East. By the time Trump took office in January 2017, its holdings had shrunk to about 23,000 square miles. It further dwindled to 2,500 square miles in January 2018, according to IHS Markit, a research firm that has tracked territory held by the Islamic State.
So while fighting has certainly escalated under Trump, the Islamic State had begun losing territory under Obama, and experts have cited this trend and the efforts of local troops when analyzing whom to credit for these gains.
— Trump exaggerated the effect of his tax cuts on employee bonuses.
“It’s a fight for who’s going to give the most,” Trump said. “It started at $1,000, and now we have them up to $3,000.”
More than 260 companies have announced employee bonuses, raises or investments since the tax bill was passed in December, according to an anecdotal list compiled by Americans for Tax Reform, a group that advocates lower taxes. The group’s president, Grover Norquist, worked with the White House to develop the legislation.
Many have said they will give one-time employee bonuses of $1,000 to $2,000. According to the list, only one, a private insurance company, announced $3,000 bonuses for 700 employees in a news release on Dec. 21, the day before Trump signed the tax bill.
It’s worth noting that most of these businesses are financial institutions and, as my Times colleague Jim Tankersley has reported, “The payouts to workers reflect a small slice of the windfall that banks large and small are in line to receive.”