U.S. President Donald Trump delivers the State of the Union address at the U.S. Capitol in Washington on Tuesday.Kenny Holston/The Associated Press
Chris Gay is a contributing columnist for The Globe and Mail. He is a former Wall Street Journal staffer and writes the newsletter Figure at Center.
If nothing else, Donald Trump’s State of the Union speech Tuesday night confirms one thing: that he has dragged the U.S. well into the realm of banana-republic governance.
First, the sheer length, worthy of Fidel Castro’s discursos kilométricos (“kilometre-long speeches”). As with El Caballo’s trademark, hours-long bloviations, Mr. Trump’s was about two parts theatre to one part populist provocation. Anyone watching the SOTU as some sort of economic indicator was barking up the wrong demagogue.
Second, his treatment of inflation, growth and stock prices as though he determines them by pulling the right levers and pushing the right buttons is precisely the sort of central-planning naivety you hear from economically illiterate Third World blowhards.
We don’t need to fact-check every fiction that issued from Mr. Trump’s mouth Tuesday night to illustrate the delusions that he, or his speech writers, entertain these days. Plenty of people are doing that, and it doesn’t seem to matter anyway. But it’s worth examining Mr. Trump’s fanciful “golden age” description of America’s economic state and his childish understanding of the president’s role in it.
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Several assertions stand out:
Former president Joe Biden “gave us the worst inflation in the history of our country” but now “inflation is plummeting.” More evidence of Mr. Trump’s historical illiteracy and his speechwriters’ shameless indifference to facts. Inflation under Mr. Biden peaked at 7 per cent in 2021, says the Bureau of Labor Statistics, far below the historical highs of 18 per cent in 1946 and 12-14 per cent during the two oil embargoes of the 1970s.
Last year, as Mr. Trump suggests, was indeed a period of general disinflation. January’s 2.4 per cent year-on-year rate was below the year-earlier 3.0 per cent, according to the BLS. But Mr. Trump’s inflationary tariffs would suggest that disinflation is happening in spite of him, not because of him. And if the issue of “affordability” is a Democratic “hoax,” then why the concern about price stability?
“The stock market has set 53 all-time record highs since the election.” Nice if true, but presidents have very little influence over long-term stock prices, so taking credit for record highs is a little like taking credit for nice weather. (Will he also accept blame if the market tanks?) The biggest single mover of stock prices is earnings, no one should be surprised to learn.
“In 12 months, I secured commitments for more than $18-trillion pouring in from all over the globe.” The libertarian CATO Institute calls this number “mostly fake.” By the time you weed out of that hallucinatory number factors like prospective (as opposed to realized) foreign direct investment (FDI), routine U.S. business expenses and vague commitments to purchase U.S. goods, CATO finds “no evidence of a significant uptick” from the Biden era, when FDI grew 23 per cent faster than the first three quarters of last year. For someone who’s constantly accusing others of fake this and that, Mr. Trump is remarkably comfortable with fakery when it suits him.
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“A short time ago, we were a dead country. Now we are the hottest country anywhere in the world. The hottest.” He might want to define “dead” and “hottest.” U.S. GDP grew 2.2 per cent last year (down from Mr. Biden’s last two years). India’s economy grew by an estimated 7.4 per cent last year.
“Democrats are destroying this country.” This doesn’t square with “The roaring economy is roaring like never before.”
The SOTU ritual, like presidential debates, has become a tedious, farcical affair that no one should watch without a stiff drink.
If there was any indication of the state of the union on Tuesday, it was in the audience: The GOP’s trained seals dutifully played their roles in the scripted call-and-response ritual, rising on cue to amen every applause line. Sullen Democrats sat on their hands and stewed. The state of the union is fractious.
What the speech also demonstrated is that Mr. Trump has nothing one could reasonably describe as an ideology. Ideology implies some degree of reading, analysis and intellectual coherence. Unless you count a few crustacean Archie Bunker notions about what’s wrong with the world and how to fix it, Mr. Trump is ideologically a blank slate.
One thing he emphatically is not is an economic “conservative,” as that word was once understood. Pre-MAGA conservatives argued – and anyone who reads the news knows – that presidents don’t control the economic measures of well-being that they flaunt when the numbers are strong and ignore when they’re bad. Indeed, no one should want to live in an economy where presidents determine inflation rates, pick winners, spur stock prices and generally “run the economy,” a phrase that should be outlawed.
For all that, let’s acknowledge that Mr. Trump did say something plausible on Tuesday: “What a difference a president makes.”
Well yes, that seems fair.