Photo by Mads Eneqvist

As we approach the two-year mark since Donald Trump’s second election victory, it’s a good time to do a little economic scorekeeping. Before getting into where the economy is and where it’s going, it’s worth a little reminder of where it was before the election.

This is important because Trump and the Republicans continuously  spew utter nonsense about an economic disaster that only exists in their imagination. By literally every standard measure, the economy was doing extremely well just before the election. The unemployment rate was hovering near 4.0%, and nominal wages were growing at roughly a 4.0% annual rate.

Inflation had slowed sharply, with the year-over-year rate at 2.6% in October of 2024. This translated into real wage growth of close to 1.5%. Inflation was expected to continue to slow, with most projections having inflation coming in very close to the Fed’s 2.0% target by the end of 2025.

There had been a massive surge in the number of people able to work from home as a result of the pandemic, with that figure still being close to 20% by the end of 2024. These people were saving hundreds of hours a year in commuting time and thousands of dollars annually in commuting-related costs. There also had been an unprecedented explosion in factory construction, with real spending in 2024 more than double the pre-pandemic level in 2019.

Growth for the year was 2.5%, and it was expected to be above 2.0% for the near future. This story was the basis for The Economist’s famous cover story about the U.S. economy: The Envy of the World.

Trump Takes Over: The Story Darkens

Virtually without exception, the data have gotten worse under Trump. Inflation has risen; nominal wage growth has slowed. Factory construction has plummeted. The trade deficit, which he views as a central measure of economic failings, has soared. Interest rates have risen, and the United States has fallen far behind the world in the green transition. China’s production of wind and solar energy exceeds our total production of energy. People have lost health insurance coverage, and costs are soaring for those who still have it.

The economy has become almost completely dependent on the AI bubble, as most other forms of investment are being crowded out. With real wages falling and job growth slowing to a trickle due to mass........

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