Larry Summer's pessimism cannot explain President Trump's optimism. @LizPeek @TheHill

Aug 11, 06:13 AM

AUTHOR.

(Photo: President Barack Obama talks with Office of Management and Budget Director Peter Orszag, right, National Economic Council Director Larry Summers, and Assistant to the President for Energy and Climate Change Carol Browner, at the end of a climate change meeting in the Roosevelt Room of the White House, Oct. 14, 2009. (Official White House Photo by Pete Souza)

Date 14 October 2009, 17:32

Source P101409PS-0504

Author The White House from Washington, DC)

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Larry Summer's pessimism cannot explain President Trump's optimism. @LizPeek @TheHill

Obama's economist grasps at straws trying to devalue Trump's impact

BY LIZ PEEK, OPINION CONTRIBUTOR — 08/09/18 11:30 AM EDT 406THE VIEWS EXPRESSED BY CONTRIBUTORS ARE THEIR OWN AND NOT THE VIEW OF THE HILL

Larry Summers is grumpy that President Trump is taking credit for the booming economy. Wait until the former mastermind of President Obama’s economic strategy sees the most recent IBD/TIPP Poll. That survey, according to Investor’s Business Daily, shows Americans giving President Trump an “A” for his handling of the economy.

The poll shows their “Economic Optimism” index climbing in August to 58, the second-highest mark since January 2004.

In addition, they note other indicators that the nation’s mood has brightened:

In August, respondents rated their “Quality of Life” at 64.2; the previous all-time high was 63.1, recorded in January 2004.The average under President Obama was 53.7.

Similarly, the latest reading on “Direction of the Country” hit 50.3, up 13 percent from the prior month, and the highest recorded since 2005. That compares to a 17-year average of 41.6 and an average of 37 during President Obama’s time in office.

The “Financial Stress Index,” which has averaged 59.4 since it was created in 2007, plunged in August to 47.4, its lowest level ever. As IBD explained, “People are feeling more secure in their finances than they have at least since the early 2000s.”

Meanwhile, the president’s approval ratings came in at 41, the highest level since March 2017. Fifty percent of respondents said they disapprove of the job Trump is doing, down 4 points from July. His “Leadership Index," similarly, saw the highest score since his first months in office.

Is it coincidence that these improved ratings have tracked the acceleration in the economy and improving jobs market? Of course not. A recent Rasmussen poll showed that 50 percent of likely voters say Trump deserves plaudits for the improving economy, while only 40 percent credit President Obama.

Even in a Quinnipiac poll taken at the height of the controversy over Trump’s Helsinki summit, when the president came under extreme criticism, respondents by a 49-47 margin were positive on his handling of the economy.

Larry Summers not only disagrees that President Trump has anything to do with our improving economy, he is also reluctant to bury his gloomy “secular stagnation” theory that income and job growth will forever be severely restricted.

He is, of course, in the position of having to explain why the Obama administration, in which he served as director of the National Economic Council, failed to excite higher investment and spending and instead presided over the slowest post-recession growth in modern times.

His arguments are, befitting a distinguished economist, convoluted. He wrote in a recent Financial Times op-ed that “if unemployment were at its long-term level of 5.5%, instead of its current 3.9%, Mr. Trump’s approval rate would fall lower…” Here’s the thing, Mr. Summers: It’s not at 5.5 percent.

He also says that the “acceleration of growth…is well within the normal range of growth forecast errors.” He notes that before the election the estimate for 2018 growth was 2.1 percent. “The consensus forecast of 2.8% for 2018 [does] not represent a statistically significant fluctuation from the mean.” ...