A few years ago, I was in a meeting with all the bigwigs from Argonne and
the Director of the Department of Energy’s Chicago Area office (top official for six Midwest states energy operations). The meeting focus: A mess created by management problems would potentially hold up or kill building the billion-dollar Advanced Photon Source.

The Director briefly listened to all the explanations and finally said: “I don’t care about the problems. I want to know whose job is on the line to fix them.” I looked around the room and determined I was the lowest on the totem pole. It did not take an Einstein to figure out how that would end. I had two choices: 1) let someone else try to fix the problems and take the blame if they failed, or 2) blurt out, “I’ll fix the problem.”

I ended the program three months early and was $2 million under budget. Fortunately, I got recognition for doing the job well and the Director’s award with a nice dollar.

Biden vs. Trump Economics

I want to tell you that Biden or Trump did a better job with the economy, but I can’t compare either of their economics. It is apples and oranges.

Trump took over when the economy was experiencing creeping inflation.
Prices rose by two percent on average, and GDP rose by two percent. He inherited the best economy ever.

The pandemic hits, and all of Trump’s numbers tank, so comparing from
start to finish makes no sense.

On the other hand, Biden took over during the pandemic and had to deal
with a post-pandemic where consumers spent pent-up income wildly when the economy came back alive. Prices rose, through no fault of his, to ten percent. The Fed shoots up the interest rate, which impacts housing, cars, etc. He should get credit for the Chip and Infrastructure programs reviving manufacturing and other home-grown jobs, but he doesn’t currently.

Today, economists describe the economy as the Goldilocks economy. It is
neither too hot nor too cold, and it is just right. During Biden’s administration, the economy landed softly. Yet, unlike me, he is not getting credit for the job.

So where does that leave us? If we cannot compare the past, let’s look at the future. Analogous to my experience, the choices are simple. You rely on someone else to determine your fate or do it yourself.

In the case of Trump, he is a supply-sider. Leave it to business to balance the economy. How does that work?

1. Lower the taxes to the rich and corporations.
2. Lowering taxes for the rich, who save the most, will increase the
   money supply and lower the interest rate. Corporations will invest the
   money and, given better bottom lines, will borrow more at lower
   interest rates (6 months to complete)
3. Business puts together a business plan (6 months to complete)
4. Business hires and building designer (6 months to complete
5. Business constructs the new plant (1-2 years)
6. Business buys machines (6 months)
7. Business hires labor (6 months)

There are problems with this approach.

1. If the government overspends, it goes to the same markets as the
   corporation to borrow, increasing the demand for money (Crowding
   out effect). Trump was a big spender, so interest rates shot up.
2. Lowering taxes for the rich skews the distribution of income, and that
   leads to social unrest. (One of the root causes of the Black Lives
   Matter movement is income disparity. Haiti is another example of
   social unrest due to income disparity).
3. During the Trump administration, Corporate tax reductions were used
   to buy back stock, not new equipment.
4. It takes four to six years to see the results.

On the other hand, the Biden Keynesian approach to increasing government spending with government employees monitoring actual job growth and completion is a hands-on method. He released oil from strategic reserves to attack gas prices. He got bi-partisan support for infrastructure and Chip manufacturing. We’ll have to see in November if his hands-on Keynesian approach results in Director’s award.