US stocks are up by 31%, the most under any president since Roosevelt. There are 2.2 million more jobs. The economy is expanding by more than 3% a year. As President Donald Trump completes a year in office, the "other Project Fear" the one that said Trump would tank the US economy is looking as silly as the first one over Brexit. Sure, he is a boorish ignoramus with the ego of a deranged toddler. But that shouldn't blind us to the fact that he may be doing some good.
Anyone looking back at Trump's first year in the White House would surely be struck most by the chaos and disorganisation that has marked his presidency. He is on his second chief of staff, and has had more press secretaries than anyone can count. He has been under investigation for links to Russia, and engaged in a very public row with the FBI. He has blundered his way though foreign capitals, making enemies wherever he goes, and squandering whatever goodwill the US once had.
A blizzard of late-night tweets have verged on the insane, and to cap it all his anniversary of taking office was marked by a government shut-down. Michael Wolff's The Fire and the Fury is likely to be only the first of many riveting exposs of life inside Trump's inner circle. Yet that has not stopped the economy performing exceptionally well. The Federal Reserve has already raised interest rates twice, with little impact. When Trump, stealing a pledge from his rival Jeb Bush, promised 4% growth on the campaign trail most economists laughed. But it is not far off that now, and may be achieved next year.
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Where's that wall?
One reason, it has to be said, is that Trump has conveniently forgotten many of his more ridiculous policies. If there is a wall being built between the US and Mexico there is no sign yet of any bricklayers starting work. Immigration restrictions have been modest. There is no sign of a trade war with China. He hasn't even nuked anyone not yet, anyway. What he has done is push through a pair of big reforms. First, he completed a radical overhaul of the tax system. As the rest of the world steadily cut corporate tax rates over the last two decades, the US left its where it was. The result? At 37% it was charging one of the highest rates in the world.
Companies were regularly moving abroad to avoid it. Rather than trying to trim that, or introduce a few more fiddly allowances, Trump has slashed the rate way down to 20%. It is one of the boldest single tax cuts since the days of Margaret Thatcher and Ronald Reagan. It already seems to be having an impact, with companies, such as Apple, bringing home billions stored overseas, much of which will end up being invested in the US economy.
A bonfire of regulations
Second, he has started to slash red tape in what had turned into one of the most over-regulated economies in the world. In Trump's first year, 22 regulations have been eliminated for every new one introduced, and an executive order makes it mandatory for Congress to repeal two rules for every new one it creates. True, he has had more success in stopping new regulations than the harder task of getting rid of old ones. But he has made an impressive start.
With his mix of self promotion and personal bombast, he may even have boosted confidence. True, a lot of that is down to luck. Trump inherited a growing economy, and the stockmarket was already buoyant before he moved into the White House. But he has also pushed through some effective pro-growth policies. Over in Europe, we should not allow his often obnoxious personal qualities, or the chaotic state of his administration, to obscure the fact that he may well shape up into one of the more successful presidents.
Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years.
He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.
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