Bidenomics vs. Trumpenomics

 Bidenomics vs. Trumpenomics

I hear a great many MAGA Trump supporters parrot the rhetoric that the economic policies of Joe Biden are bad and that only Trump can fix them. They seem to think that Trump’s business background makes him the better choice. Most don’t remember that Trump often fails in his business ventures.

Donald Trump has at least six bankruptcies from over-leveraged hotel and casino businesses in Atlantic City and New York. There was also Trump Shuttle, Inc. that defaulted on loans, Trump University forced to close after lawsuits and investigations, Trump Vodka that failed in 2011, Trump Mortgage that lasted only one year, GoTrump the travel site that suffered a similar fate, and Trump Steaks that failed within two months of its launch. Trump Airlines borrowed $245M to buy Eastern Air Shuttle, then installed gold bathroom fixtures before defaulting on their loan. Trump Magazine failed. Trump the Game failed.

Trump often fails to remember the key rule in all new businesses which is DROOM, or Don’t Run Out Of Money. All fledgling businesses need enough cash to sustain them while the business builds. You don't go into businesses expecting to turn an immediate profit, you have to be willing to support that business while markets develop and your business grows to be profitable.

For all of Trump’s claims of business acumen, the truth is that he has done rather poorly. Forbes calculated in 2021, that if Trump had never gone into business and merely invested his inheritance of over $400M in the S&P 500, his net worth would now be around $3B and he would still be on The Forbes 400 list of wealthy Americans. Instead, Trump is no longer on that Forbes list that he envies. His "business sense" has been so bad that if he were a candidate on his old show The Apprentice, he would have to fire himself. Actually, the only business Trump has been in that has made him lots of money was showbusiness. He made a ton of money ($427.4M) as the fake tycoon on his reality TV show.

Trump’s current financial situation is the result of his mismanaging his inheritance, stiffing vendors and other investors, and raising money disguised as political support. His idea seems to be to take a shotgun approach where he will try anything on a whim; casinos, vodka, steaks, a charity, a university, and now sneakers, to see what will stick. Where he can, he will use OPM (other people’s money), dodge his taxes, stiff his vendors, and intimidate anyone in his way with legal shenanigans.

At the Trump International Hotel, repair contractors were unpaid to the tune of almost $3M. A small business owner was cheated out of $100,000 worth of pianos. At Trump’s hotel in Washington DC, he left $5M of bills unpaid. Yet, working stiffs across the country think Trump is a business genius. These are the working stiffs who have yet to be stiffed by Trump.

While he was president, he misled the American public about the Covid-19 pandemic which made the resulting economic downturn worse than it should have been. His domestic policies damaged US industry and alienated our allies. He still thinks that tariffs are a good thing when the US government collects revenue from other countries. He either doesn’t realize or thinks simple-minded people don’t understand that US taxpayers pay those tariffs by paying higher costs for those imported goods.

During his presidency, his economic policy, which he says he will continue if reelected, was one of tax cuts for the wealthy and big business, an attempted repeal of the Affordable Care Act (ACA), trade protectionism, and deregulation. As much as any president can influence the economy, Trump’s policies get a mostly failing grade. The Cato Institute, a conservative (or libertarian) slanted organization, gave Trump a report card on his presidency. They totally discounted the period of the COVID-19 pandemic to be fair. Trump then got a C on Fiscal Policy, a C on Regulation, a B on Jobs, a D+ on Entitlements, a D- on Trade, and an F on Immigration. The writer of this review, Scott Lincicome, stated in summary, “These grades would prevent President Trump from graduating.”

Trump’s opponent in this contest is our current president, Joe Biden. The Biden economy has added over 13 million jobs with over 800,000 of those jobs in manufacturing. The stock market is breaking all-time records regularly. He got the American Resue Plan (ARP) passed assuring a faster return to normalcy after the crisis of the pandemic. The ARP made the US the only G-7 nation to make it back to pre-pandemic growth levels. Our GDP surged by around 6 percent. The starting 6.3% unemployment rate is now below 4%. He has protected the ACA. Workplace job satisfaction, according to a recent study, is at a 40-year high. Low mortgage rates allowed 15 million homeowners to refinance at lower rates saving them an average of $2,000 each year.

Biden managed to push through, despite not having a friendly Congress, the passage of the infrastructure bill creating jobs, stimulating the economy, and fixing our broken infrastructure. The CHIPS Act was passed to support the semiconductor industry and help protect us from dependence on foreign supplies. The Inflation Reduction Act was narrowly passed to support our shift away from fossil fuels. The payoff for the IRA will be long-term. One hidden benefit of the IRA was a corporate buyback tax that provides a more effective measure of taxation on corporations. While taxing authorities have to rely on complex tax laws and largely take a corporation’s word on corporate profits, taxing what they pay out to shareholders is much more efficient.

Two areas of the economy that average Americans understand are the Two G’s. Gas and Groceries. Presidents have little control of these despite getting the blame or rarely the credit when prices rise or fall. In the case of groceries, the market is controlled by a very limited number of competitors, sometimes only three or four companies in key segments, who have little incentive to lower prices. Pandemic shortages gave them an excuse to raise prices but when supplies normalized, those record profits caused by sellers' inflation were hard to reverse. This lack of competition is the result of long-term reductions in regulation and a willingness to allow large corporations to dominate an industry. Deregulation and monopoly through mergers and a laissez-faire attitude toward big business have been the cornerstone of Republican presidents for years.

Gas prices are the result of global supply and demand. Neither Trump nor Biden can be blamed or credited for fluctuations here. Policies and legislation play only a very minor role. The war in Ukraine, the war in Gaza, Houthi attacks on Red Sea shipping, aliens from outer space, you can name any one or all of these and still not understand why gas will never be thirty cents a gallon ever again.

In conclusion, the Trump economy was poor, but he had an excuse. He is a poor businessman who didn’t understand the global economy and was hit by a pandemic. Biden has served during a surging economy where the upper classes and the wealthy have seen more benefits than Americans struggling with debt. You probably don’t have to ask who I would rather see in charge of our economy in 2025. I don't want to play Trump the Game anymore, nobody wins.