Trump Claims Credit for the Economy. Not So Fast, Says Obama.

WASHINGTON — The economy is doing quite well, thank you very much, and the president would naturally like to take credit. Both of them.

Barely a day passes without President Donald Trump boasting about the growing economy, claiming with a mix of hyperbole and fact that it is “booming like never before.” But former President Barack Obama finds all the Trumpian chest-thumping more than a little grating, given that the “booming” started on his watch.

The economic contest between the 44th and 45th presidents went public in recent days when Obama expressed his irritation and Trump fired back. At stake are more than ordinary political bragging rights. Central to Obama’s historical legacy is the economy’s recovery after its plummet to the brink of a new Great Depression. And central to Trump’s current political standing is its further expansion.

Never mind that the nation’s economic fortunes depend on more than the occupant of the Oval Office and his policies, driven as well by interest rates, technological innovation and the health of the global economy — trends beyond the control of any president. Voters and historians nonetheless assign credit and blame to presidents for the state of the economy. When it comes to economics, presidents would rather be remembered as Ronald Reagan or Bill Clinton than Herbert Hoover.

With midterm elections coming, the economy is Trump’s trump card, the most unalloyed note of success in an otherwise herky-jerky presidency. Plagued by scandal, investigations, dysfunction in the West Wing and stalemate on Capitol Hill, Trump is making the surge of new jobs and business activity his most powerful argument for keeping Congress in Republican hands. Even with his own popularity low, consumer confidence and voter faith in the economy are on the rise.

“The Trump economy so far has reached a real inflection point,” Larry Kudlow, the president’s national economics adviser, said in an interview Sunday. “Trump has ended the war on business and he’s ended the war on success, and he’s been urging people to go out and start a new company and go back to work.”

After a long period of silence, Obama expressed his exasperation Friday. “When you hear how great the economy’s doing right now, let’s just remember when this recovery started,” he said in a speech kicking off a midterm campaign blitz. “When you hear about this economic miracle that’s been going on, when the job numbers come out, monthly job numbers, suddenly Republicans are saying it’s a miracle. I have to kind of remind them, actually, those job numbers are the same as they were in 2015 and 2016.”

Trump made clear he does not plan to surrender to his predecessor easily. “He was trying to take credit for this incredible thing that’s happening,” Trump told supporters in his own appearance in Fargo, North Dakota, shortly after Obama’s televised speech. “It wasn’t him.” He added that the recovery under Obama was the weakest in history.

In the days since Obama spoke out Friday, Trump has kept up the argument. On Twitter, he retweeted a supporter’s message: “Watching @BarackObama take credit for @realDonaldTrump successes is disgraceful.”

On Sunday, quoting another supporter, the president wrote: “Barack Obama talked a lot about hope, but Donald Trump delivered the American Dream. All the economic indicators, what’s happening overseas, Donald Trump has proven to be far more successful than Barack Obama.”

Growth since the recession of 2008-09 has been slower than after any other recession since World War II, and the distribution of the growth has been less equal than in the past. But growth has also been unusually steady, set in motion by Obama’s extraordinary economic interventions early in his presidency. This is now one of the longest periods of uninterrupted economic growth in U.S. history, with 95 straight months of job creation.

In the 19 months starting after Trump’s inauguration, the economy has created 3.58 million new jobs — but that is still shy of the 3.96 million created in the last 19 months of Obama’s presidency. The nation’s economy has grown at a steadily higher pace in the past year than it did during the end of Obama’s term, reaching an annualized rate of 4.2 percent in the second quarter of this year. But the last time it was that high was in 2014 — when Obama was in charge.

Moreover, even the faster growth under Obama or Trump remains modest compared with some previous recoveries. During the first half of this year, the economy grew at a 3.3 percent annualized pace, slower than every year of the Reagan recovery, which averaged 4.4 percent between 1983 and 1989.

Trump has some particularly compelling bragging points, though. Unemployment is now at 3.9 percent, close to the lowest it has been in a half-century, and joblessness among African-Americans and other minorities has also fallen to historically low rates. The stock markets have reached record highs as well. All of these trends began when Obama was president. Trump’s supporters argue that he turbocharged them with his tax cuts and deregulation, defying critics’ predictions that he would wreck the economy.

“I can say that the economy was in fine shape at the end of the Obama administration, despite what President Trump sometimes asserts,” said N. Gregory Mankiw, a Harvard economist and chairman of the president’s Council of Economic Advisers under George W. Bush. “The tax cuts likely made it stronger, while worsening the long-term fiscal imbalance. Reasonable economists can and do disagree about how much impact the tax plan has had.” As often happens, Trump overstates the facts, claiming that a good economy is better than it has ever been in U.S. history. The Washington Post’s fact-checker called that assertion overblown over the weekend, giving it three out of four possible Pinnochios and noting that the economy did better under Ulysses S. Grant, Dwight D. Eisenhower, Lyndon B. Johnson and Clinton.

Obama’s former advisers note that their boss inherited what was widely seen as the worst economy in generations and took enormous political risks by making unpopular decisions to turn it around, while Trump inherited a growing economy and made an easy decision to cut taxes.

“A buffoon could have kept the recovery going,” said Jen Psaki, who was Obama’s White House communications director, “and in fact one has so far.”

Christina D. Romer, an economist at the University of California, Berkeley, who headed Obama’s council of advisers, said the former president “was fundamentally correct to claim much of the credit for the current health of the economy.”

“That said,” she added, “I suspect that some of the current growth is being spurred by the Trump tax cut.” She said the reduction in taxes had produced a stimulus much like the extra spending Obama enacted in 2009. The difference, she said, was that Obama’s stimulus was undertaken when the economy needed it, while Trump’s tax cut was not needed in an already growing economy.

Kudlow, however, pointed out that while growth was higher in 2014, it had slowed by the time Obama left office. “President Obama really let an anti-business attitude seep through,” he said. He said business investment had increased since Trump took office, encouraging spending on new factories and creation of new businesses that would continue to pay off.

One way that even Obama’s former advisers say Trump has done better than his predecessor has been in trumpeting the economy. Where Obama was always measured in his descriptions of the recovery for fear of being accused of exaggerating his case or ignoring the very real pain many still felt, Trump does not bother with caveats or subtlety.

His skill as a salesman may help explain why the consumer confidence index has shot up significantly since his election. According to Gallup, 54 percent of Americans rated the condition of the economy as good or excellent last month, up from 25 percent in April 2016. When Obama took over, it was just 7 percent.

“There’s a linkage between taxes, regulation, confidence, business investment and wages,” Kudlow said. “It’s changed the thinking of people.”