President Trump has proclaimed America 'open for business'.. At this week's State of the Union, he went further to applaud an improving economy and rising stock market. We thought we'd borrow the question of another president, Ronald Reagan, and ask economist Peter Morici: "Are we better off than a year ago?"
Sharyl: What has been would you say the reality of the economy under President Trump?
Peter Morici: Yes well the economy has done quite well. Part of it is just distance from the financial crisis. Final healing but also part of its deregulation in anticipation of the tax cuts. America is open for business again. Washington is no longer an oppressive force on the neck of American commerce.
Sharyl: What would you say are the big surprises?
Peter Morici: The big surprises are how effective he's been at deregulation. Very quietly but effectively moving conservatism to the federal bench so that the courts are not now in a third chamber of the legislature and getting the tax cut going. Goodness, that was real magic.
Sharyl: Would you say the tax cut was the biggest accomplishment of his first year related to the economy?
Peter Morici: We've averaged 3 percent growth since he became president. That's something Barack Obama simply couldn't do.
Sharyl: President Obama gave a speech not long ago in which it appears he was thanking himself for some of the good things that have happened to the economy…
President Obama: Thank you, Obama
Sharyl: Isn't there some truth to that? Some things that we do with the economy takes time before it kicks in it's not an immediate effect?
Peter Morici: President Obama was president for eight years. We averaged one point seven percent growth his last year in office was one of the worst years that we had during the recovery. It's very hard for me to fathom the notion that somehow or that he was responsible for the resurrection of American productivity that took place once Donald Trump told the American business hey guess what Washington isn't going to hassle you night and day. The most significant thing that's happening right now is the regulators are actually taking lunch and summer vacations.
Sharyl: When you look at maybe something that wasn't accomplished related to the economy what would you say is President Trump’s most epic fail if there is one, health care?
Peter Morici: It's a terrible burden on American business and all American families. We spend 50 percent more on health care than the Germans do and the Germans have a better system. Frankly, we have to fix that. And neither president's Trump nor Obama found the way.
Sharyl: Am I correct that you are not a big fan of the tax proposals, and President Trump’s and Congress tax plan?
Peter Morici: Well I like the fact that we're cutting the corporate tax. But I think that we should have gone much further. We should have had border tax adjustments and gotten rid of most of the exclusions and exemptions gotten the rate down to 15 percent on the personal tax side. We could have gone much further but chose not to. For example, you know the Wall Street types and look at the White House it's become this diminution Mr. Trump won't benefit from the carried interest. And it's still that if there was a stealth dealing that was it Trump deserves an A on the corporate tax and it gave money to some personal taxes because he put his own personal interests first.
Sharyl: What do you think are going to be the biggest economic challenges during President Trump's here too.
Peter Morici: Well now comes the hard stuff. It's his hardest cutting taxes is doing something about entitlements so people have more incentive to work it's even tougher because he needs Democrats to cooperate in the Senate on that. And that's not likely. I think that Mr. Trump has put himself in a hole by being so pugnacious combative and tweeting so much and irritating so many people. He makes it difficult. Now that the economy is growing and performing for Democrats to some come off the bench and start to meet him halfway. Frankly, the elections in Alabama and Virginia indicate that obstructionism is a winning strategy for Democrats.
Sharyl: President Trump recently went to Southeast Asia and he has made China the economic situation with China a focus of some of his attention. What would you say where we are headed on that-- a lot of people say China is one of our biggest challenges.
Peter Morici: China's one of our biggest challenges, and the administration is coming up short. You know targeting aluminum and a few other sectors to fix doesn't solve the systemic problem that we have with China. The trade deficit was big when he came into office and it's even bigger now if this one single barrier to 4 percent growth. It's China. China China. And on that President Trump comes up short short short. He's badly advised by octogenarians. He simply doesn't see the future.
President Trump has imposed tariffs on US imports of solar panels and washing machines. China is the largest supplier of solar panels to the US. Some suggest it could be the first shot in a trade war with China.