President Trump’s positive impact on the U.S. economy and markets is unassailable.
Except for a short disruption in February, the major stock market indices have been on a steady ascent since Donald Trump’s formal selection as the Republican nominee for president. The Nasdaq Composite Index has sailed from 5036.37 on July 19, 2016 to 7637.86 at the closing bell on Tuesday – continuously meeting and exceeding record highs along the way.
We have seen similar market trends in the Dow Jones Industrial Average and the S&P 500, which have climbed from 18559.01 and 2163.78 on the day Trump was nominated to 24799.98 and 2748.8 by Tuesday, respectively.
This market strength (especially the Nasdaq's) is a really big deal. We are in an age of massive technological advancement and innovation that could potentially catapult our society into a new era of global leadership. Advancements in driverless cars, artificial intelligence, computing power, and helpful uses for big data will bring about changes in virtually every aspect of our lives, including health care, transportation, communication, and commerce. The Nasdaq tracks almost 3,000 mostly technology-focused companies which are working on these dramatic innovations. This includes America’s five largest big tech companies – Amazon (AMZN), Alphabet (GOOG, GOOGL), Apple (AAPL), Facebook (FB), and Microsoft (MSFT).
I had a great Facebook Live conversation Tuesday with Terry Campbell, Nasdaq’s vice president and head of government relations. We talked about the amazing comeback that the American economy has been seeing under President Trump and the Republican leadership.
As I wrote in my new book, Trump’s America: The Truth About Our Nation’s Great Comeback, our Gross Domestic Product (GDP) has been on the rise. Despite a summer of devastating hurricanes that caused billions of dollars in damage and job losses in at least three states, Puerto Rico, and the U.S. Virgin Islands, the U.S. GDP grew by 2.6 percent in the last quarter of 2017. This is lower than the 3-to-4 percent growth for which President Trump has aimed, but as I wrote in the book, 2.6 percent was still a welcome change from nearly a decade of slow growth.
“These growth numbers were still astounding considering President Trump inherited Obama’s lethargic economy. In fact, the first quarter’s weak growth was the last holdover from the Obama years because Trump’s policies were just beginning to go into effect. In fact, the average growth for the last three quarters in 2017 was 2.97. Even with the first quarter included, Trump’s first year ended less than half a percentage point away from his goal, which the media had declared impossible.”
And as I mentioned to Terry on Tuesday, some economists are anticipating second quarter GDP growth this year to exceed 4 percent. In fact, the Federal Reserve Bank of Atlanta is estimating more than 4.5 percent growth in the second quarter.
The remarkable success in our markets and economy are directly related to the Trump agenda. As I said at Nasdaq, the three major drivers are deregulation, the Tax Cuts and Jobs Act, and innovation.
First, President Trump’s massive effort to cut government red tape has allow companies to focus on their businesses rather than paperwork and federal rules. As I wrote in Trump’s America, the Competitive Enterprise Institute estimates that the total economic impact of federal regulatory compliance is about $1.9 trillion a year. Between the Trump administration’s ability to repeal 22 rules every one it has created and the Republican Congress’s ability to scrap 15 expensive Obama-era regulations through the Congressional Review Act, American companies have saved billions.
These businesses have been using these savings to expand their companies, increase hiring, and boost wages. This has helped lead us to the lowest unemployment rate in 18 years. In fact, the latest Bureau of Labor statistics indicate there are more open jobs than there are people looking for work in America. This is a wonderful problem to have.
Similarly, the Tax Cuts and Jobs Act significantly lowered the corporate tax rate (as well as personal income taxes for most Americans), and this has led nearly 600 companies to give bonuses, raises, and better retirement benefits to their employees. In fact, the tax cuts have made the United States so competitive, more and more international companies are seeking to move into the United States.
In addition to boosting employment and wages, the Trump agenda has allowed companies – especially the ones Nasdaq tracks – to focus on innovations that will further grow the economy and help make life better for Americans.
Finally, along with creating more jobs, higher wages, and greater productivity, our strong economy has allowed us to use our economic strength to influence countries such as North Korea and China. This is exactly why President Trump integrated the economy and trade into his National Security Strategy.
As I mentioned to Terry at Nasdaq, the continued success of the economy and markets under the Trump-Republican agenda will be a decisive issue in the 2018 elections – and I believe it will start a “red wave” in the Senate and allow Republicans to keep control of the House of Representatives.
The reason is simple: The number one thing you can say about President Trump and Republicans is that their agenda works.
Newt Gingrich is the former Speaker of the House.