By Lewis K. Uhler and Peter J. Ferrara, NTLF
The unemployment report for June continued the great news in May, despite efforts to scare off recovery through further COVID-19 “shutdown scares”.
May’s unemployment report showed an all-time one month record increase in new jobs of 2.5 million, producing a decline in unemployment of over one percentage point from 14.7% to 13.3%. But June’s unemployment report showed another all-time one month record of almost 5 million jobs, resulting in an unprecedented one month drop in unemployment of over 2 percentage points, from 13.3% to 11.1%. At that rate, after one month more unemployment can be in single digits.
This return of Trump’s Blue-Collar Boom, the best in several decades, is yet another sign that Trump is prevailing over the Coronavirus Pandemic. Despite the mainstream media ballyhoo over a modest increase of Coronavirus infections in some states, pumped up by testing increases for infections, the much more important death rate is showing record declines.
Those developments are resulting from a record deployment of all the resources of modern medicine, producing dozens of medications and treatments for the sick. That is also rapidly producing dozens of new vaccines, potentially available even before the end of the year.
The fundamentals of the U.S. economy are so strong – despite COVID-19 – because Trump replaced the anti-growth economic policies of the Obama-Biden years with textbook pro-growth economic policies. Obama-Biden could barely get monthly job increases up to 200,000 thousand jobs, even though America’s economic history has always been “the deeper the recession [the 2008-2009 Great Recession], the stronger the recovery”.
Obama/Biden only compounded the economic problems America was in when they were in office by increasing the tax rates of virtually every major federal tax. Those tax increases swamped the economy into the worst economic recovery since the Great Depression! Now Biden is promising to do that again, proposing the greatest tax increase in American history at nearly $4 trillion, just the opposite of what Trump did to create his Blue-Collar Boom.
Trump and Congressional Republicans quickly replaced those Obama-Biden tax increases with tax reform legislation: The Tax Cut and Jobs Act of 2017, which cut tax rates for all workers, middle class workers, Blue-Collar workers, even the least educated and lowest income. It also slashed oppressive corporate tax rates from close to 40% (counting state corporate rates on average), down to 21%. Nor did it forget small businesses, adding an innovative new 20% deduction for small business and professional incomes.
Trump’s pro-growth economics also included across the board deregulation, again the opposite of all the record regulation of the anti-growth Obama-Biden years. Trump’s deregulation focused most impressively on energy production, to end the Obama-Biden rules aimed at “killing” fossil fuels: oil, natural gas, and coal.
Under Trump’s massive deregulation, America surged to world leadership in production of oil, surpassing Russia and Saudi Arabia combined, and leading the world in production of natural gas. America also has the resources to lead the world in production of coal, if Obama-Biden hadn’t tried so hard to drive American coal out of business.
That focus on energy production has directly benefitted Blue-Collar workers, because manufacturing is so energy intensive. Oil and gas prices were sharply reduced by all the new production of oil and natural gas. Trump’s deregulation preempted regulation killing fracking, which has produced oil and natural gas out of shale rock across the American continent.
Trump’s policies have also promoted a stable dollar, with record low interest rates, which are also pro-growth.
The result has been Trump’s Blue-Collar Boom, with the lowest unemployment (by January, 2020) in 50 years, including the lowest unemployment in American history for African Americans, Hispanics, and Asians. That resulted as well in an all-time record for middle class median income, over $65,000 annually. To speed our economic recovery and secure these gains, we need more pro-growth policies – not a return to the punitive taxation and onerous regulatory regime of the previous administration.
Lew Uhler is the Founder and President of the National Tax Limitation Council and the National Tax Limitation Foundation (NTLF). He was a collaborator and colleague of Ronald Reagan and Milton Friedman in California and across the nation. Peter Ferrara is a Senior Fellow at NTLF and at the Heartland Institute. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under President George H.W. Bush.