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“It’s NOT the economy, stupid.” In opinion polls, American voters have singled out the economy as one of the most important electoral issues, perhaps the most important. It shouldn’t have been.
Admittedly, the US economy has done well under Trump until the crown crisis, and of course the incumbent president takes credit for this. Many see Trump’s economic policies as the reason he and the Republicans made an unexpectedly good decision.
The United States is a rich country, the income per person is approximately 30 percent higher than in other large and rich countries like the G7 group, such as France, Japan, Canada and Germany. Under Trump, leadership over these countries remained until the crown crisis.
However, under both Bush the Younger and Obama, that lead widened by a few percentage points. Unemployment fell with Trump, but fell at the same rate with Obama. The stock market rose a little faster under Trump, 11 percent a year versus 9 percent under Obama.
Trump’s tax reform meant slightly lower income taxes for most people and significant cuts in corporate taxes. Previously, corporate taxes were actually one of the highest in the world, but now they are more normal from an international perspective. However, it is still clearly higher than in Sweden if state taxes are included. Trump’s tax reform was probably good for growth, but compared to, for example, the Swedish tax reform of the 1990s and also the employment tax deductions, it fades significantly. Trump’s reputation as a ghost of growth is therefore greatly exaggerated.
This despite the fact that the differences in economic policy between Trump and Biden are only slightly larger than between the Swedish moderates and the Social Democrats.
Biden’s plans to raise taxes for businesses and those who earn more than $ 400,000 a year could have a negative effect on growth, but even with a rather pessimistic assessment, these are small numbers.
On the other hand, it is also not true that Trump’s policies would have widened the economic gap. The United States is an extremely unequal country. The percentage with the highest income earns almost twice as much as the 50 percent with the lowest income. In Sweden, the bottom half earn almost three times more than the top half. But extreme inequality in the United States emerged in the 1980s and 1990s. Under Trump and even Obama, not much happened in either direction.
The political discussion seems to assume that it is the president who creates economic growth. It is a mistake and it is dangerous. Growth is not created by presidents, the government, or finance ministers. It is created by all human beings who work in companies, schools and universities, but also in necessary support functions such as care, nursing, police and the judiciary.
Of course, political decisions on, for example, taxes and resource allocation are important to create good conditions for growth. But the depiction of political leaders as all-powerful growth creators in America has led to extreme polarization. Depending on who comes to power, it is considered either financially heavenly or total collapse. This despite the fact that the differences in economic policy between Trump and Biden are only slightly larger than between the Swedish moderates and the Social Democrats.
Unlike the United States, we have a fairly sensible debate on economic policy in Sweden. It is important to safeguard this. As with growth, we can only do it together.
