It’s the economy, stupid

The number of voters for D onald Trump in the presidential election was higher than the polls predicted . It seems that c ommentators and polling institutes may have forgotten the strong improvement in the US economy under Donald Trump’s presidency. The phrase “It’s the economy, stupid” from Bill Clinton’s 1992 campaign comes to mind. To be sure: Purchasing power fell due to the tariffs and the (slight) depreciation of the dollar; There has been the COVID crisis, although the fiscal response to it has been massive and the US economy has proved quite resilient. But from 2017 to early 2020, thanks to its “overheating policy” (demand stimulus provided by fiscal policy and monetary policy despite low unemployment), the United States enjoyed: A very low unemployment rate for all education levels and for all minorities; A significant rise in the participation rate, as Americans who had left the labour market in the aftermath of the subprime crisis returned; A significant rise in wages, as the skewing of income distribution against wage earners stopped; An upturn in productivity gains, as companies were forced to become more efficient (due to strong demand at full employment) and were able to invest more thanks to the tax cuts. The economic situation of Americans therefore improved markedly.