Nancy Pelosi mocks the Trump economy
House minority leader sarcastically praises the unemployment rate dropping to an 18-year low; reaction and analysis on 'The Five.'
Is Nancy Pelosi a secret agent for the Republican Party? Sometimes you have to wonder. Her latest outburst, in which she derides the accelerating economy and declining unemployment, is so nonsensical that it demeans Democrats’ credibility, shows them to be remarkably out of touch with average Americans and underscores the poverty of their competing platform. It isn’t the first time Pelosi has given GOP candidates rich fodder for ridicule; remember how she compared thousand-dollar bonuses to “crumbs?” That’s a clip that will show well in midterm campaign ads.
Pelosi’s latest Twitter sensation came amidst her weekly press conference, at which she scorned the improving jobs situation. Here’s a direct quote: "(P)eople say, ‘Oh my goodness, ... people are saying the unemployment rate is down, why isn’t my purchasing power increasing? So, this isn’t just about the unemployment rate, it’s about wages rising in our country, so that consumer confidence is restored.”
Unhappily for Nancy, but happily for the U.S., consumer confidence doesn’t need “restoring” – it is actually booming. The Conference Board reported just this week that its Consumer Confidence Index rose 2.4 points in May, and reached its highest reading in more than 17 years. Lynn Franco, the Conference Board’s Director of Economic Indicators, said in a press release, “Overall, confidence levels remain at historically strong levels and should continue to support solid consumer spending in the near-term.” Take that, Nancy!
The Conference Board survey echoes other such measures, all of which point towards continued growth and nearly all of which moved sharply higher after Donald Trump was elected president. In December 2016, the confidence index rose to 113.7, the highest level since July 2007, beating expectations by a wide margin. At the time, Franco noted that the so-called “expectations” part of the survey “hit a 13-year high.” The December 2016 report from the University of Michigan, which also tracks consumer sentiment, showed the highest optimism level since August 2001.
Those figures are impressive. Note that at no time during Barack Obama’s presidency did consumers feel similarly upbeat, despite the president’s personal popularity and his promises of “hope and change.” He delivered plenty of change; hope, not so much. Certainly the financial crisis helped keep optimism in check. But the recovery began, according to the National Bureau of Economic Research, in June 2009. For the next seven and a half years the country was subdued by a thin overhang of anxiety and caution; that cloud lifted on November 8, 2016, and there has been no turning back.
Nancy Pelosi has probably not looked for a job for a very long time, so the good news on hiring may not matter much to her.
Confidence is key. With consumer spending accounting for 70 percent of the economy, how people feel about their prospects guides their decisions to buy a house or a car, whether to invest or to save. Instilling optimism about their personal outlook is essential to an expanding economy.
A recent Pew survey indicates that 58 percent of the country thinks the economy is doing well, the most since before the financial crisis, and up from 44 percent last year. That’s the biggest jump ever seen in this series, and only the second time that a majority of respondents said they were satisfied with the economy. The assessment is shared almost equally by Republicans and Democrats. Recent polls show that, increasingly, Americans give Trump credit for the roaring economy, which has boosted his approval ratings.
What’s got people feeling more positive? Gallup reports that 67 percent of Americans think it is a good time to find a quality job, the highest in 17 years of polling on this topic and up 25 points since Trump was elected. That reading is not surprising, except to Nancy Pelosi apparently. All the indicators point to a tightening job market. For the first time ever there are more job openings than people looking for work. The vacancies are especially high in manufacturing, which is gratifying since for years liberal economists such as those who guided Obama’s economic policies have been telling us the U.S. could no longer compete as a producer. Over the past year, we’ve added 259,000 jobs in manufacturing.
Pelosi is concerned that wages are not rising. In fact, take-home pay is going up, above the rate of inflation, and more quickly than it did under Obama. Hourly wages rose 2.7 percent year-over-year in May, while average weekly income rose 3 percent. With inflation running at about 2 percent, that constitutes real growth, which is augmented by lower tax bills for most Americans. Part of the reason that wage gains have been sluggish is that we have seen little increase in productivity over the past decade. Higher output per worker allows wages to rise; that increase depends in part on capital investment by businesses.
Under Obama, businesses lacked confidence to invest for the future, so assaulted were they by onerous and costly regulations. Today, with tax cuts that encourage spending and Trump’s aggressive reduction in regulations, business spending has started to rise. It was up 9.2 percent in the first quarter, after a 6.9 percent increase in last year’s final three months. Productivity gains will surely follow, boosting wages.
Democrats have no response to the accelerating economy. They are relying on attacks on President Trump to retake the House this fall, a meager strategy. Republicans running for office will warn voters that the booming jobs market will disappear should Democrats take power, thanks to promises from Nancy Pelosi and her colleagues to raise taxes on businesses and the rich, and to revert to Obama’s anti-business playbook. They will ask themselves – are we better off than we were?
Nancy Pelosi has probably not looked for a job for a very long time, so the good news on hiring may not matter much to her. After all, she has served in Congress for 30 years. At some point, Democrats embarrassed by her slipping grip on our economic reality, may decide that’s quite long enough.
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