by Mitch Kokai
Senior Political Analyst, John Locke Foundation
[I]n President Donald Trump’s economy, I am pleased to report that Keynes’ animal spirits are moving rapidly throughout the economy and no séance is required to draw them out.
Of all places, a CNN Poll released earlier this week revealed that 71 percent of those surveyed feel the economy is in good shape – the highest level since 2001. Another bit of good news is that seven out of 10 people now say they trust the free market more than the government.
This must come as a shock to the entire field of Democratic hopefuls for 2020, as the early debate between them has been along the lines of, “My socialism is better than your socialism.”
The actual economic condition supports the robust polling results. Unemployment fell last month from 4 percent to 3.8 percent. This number is remarkable when you consider that the structural unemployment rate – the rate that is “built-in” to the economy because of a mismatch between jobs available and workers having skills to fill them – should be at over 4 percent, according to some estimates.
In other words, an unemployment rate this low shouldn’t be possible.
Animal spirits? The Bureau of Economic Analysis reports that Gross Domestic Product grew at a rate of 2.6 percent in the fourth quarter of 2018, and by 3.6 percent in the third quarter. Both of these numbers exceeded the expectations of many forecasters.
Some had predicted we would be in a recession by now. They will continue to predict that until we have one, and then proclaim their brilliance.