Taking Trump-O-Nomics To The Woodshed, Part 1

Please, just stop it!

While we are not surprised that the GOP convention orators have spared no superlatives in powdering the pig which was Trump-O-Nomics, it has reached the point of absurdity when we find a supposed sound money libertarian praising Trump’s economic record. Yet here’s what the usually sensible Peter St Onge had to say about it yesterday:

This actually plays directly into Trump’s strength, his economic management. Last time around Trump took an anemic Obama economy and delivered nearly 3% real growth per year, drove unemployment from almost 5% under Obama to just 3.5. He kept inflation low — it was 1.4% when Trump left office, down from Obama’s final read of 2.6%

In the first place, the very notion that “economic management” is a presidential “strength” is a head scratcher in itself. For crying out loud, politicians should keep their cotton pickin’ hands off the economy. Capitalist prosperity is the work of the great mass of workers, entrepreneurs, consumers, savers, investors and speculators pursuing their own best interests. Interventions by politicians—including the ones who claim to be “central bankers” at the Fed—can only undermine and thwart outcomes which would otherwise occur on the free market.

Besides that, St Onge’s proof of Trump’s allegedly superior economy consists of cherry-picked data that is embarrassingly misleading. Contrary to his claim, for instance, the inflation rate absolutely did not improve during the Donald’s years compared to the prior four years under Obama.

As we have documented time and again, the government’s inflation data is woefully deficient and understates the true inflation rate substantially. But if you must use one of the official series, the 16% trimmed mean CPI is more stable and reliable than either the headline or “core” CPI. That’s because each month it strains out the 8% high and low outliers in the overall basket of items comprising the index, thereby removing the transient fluctuations and noise.

At the same time, it doesn’t pretend that food and energy don’t ever count in the cost of living, either. Accordingly, a different batch of high and low outliers are removed each month, leaving a more stable core trend for the 84% of items which remain inside the bands each month.