CNBC editor at large John Harwood told MSNBC on Thursday that the new Congressional Budget Office report blows up Trump’s promises of up to 6% economic growth, and despite his tax cuts, worker take home pay hasn’t increased.
“The president and his economics team promised tax cuts and deregulation would lift America’s gross domestic product, or GDP as most people call it, above 3%, and keep it there,” said host Stephanie Ruhle as she introduced her guest. “The new numbers indicate that the economy slowed less than expected, that is good, but we are already seeing signs of slowing in the first quarter of 2019 especially in manufacturing.”
“This has been a long standing Republican theme,” Harwood said, reminding viewers that the GOP promised better economic growth than under Obama.
“What we’ve seen today from these numbers is that Trump has gotten to 2.9%. That is not better than Obama,” Harwood said. “In fact we saw growth decline from 4.2% in the second quarter, to 3.4% in the third quarter, 2.6 in the fourth, expected to be in the 1s in the first quarter of 2019.”
“In the long run, the CBO and Federal Reserve both say that long term growth will be below 2%,” he continued. “That is not what the trump team promised that they were going to deliver with tax cuts and deregulation.”
Ruhle asked Harwood to “de-wonk” the numbers and explain what they mean for ordinary people.
“Long term economic growth was supposed to be the thing that lifted the living standard of average Americans,” he replied. “We’ve seen long term stagnation, increasing income inequality but people in the middle and working class have not been moving ahead. People at the top have been moving ahead.” He added that “the key” to greater paychecks for middle class families was “making labor more valuable for businesses to pay.”
“There is no sign that that’s going to happen. Wages continue to grow ahead of inflation, but not by that much,” Harwood said. “So we haven’t really seen the fundamental shift in worker take home pay from the Obama Administration despite tax cuts.”