Nobel Prize-Winning Economist Says Trump Has Been an 'Economic Disaster'

As election campaigns enter their final throws, the economy is a hot button topic for both hopeful Joe Biden and incumbent President Donald Trump.

The coronavirus has seen economies across the world grind to a halt, with governments facing head-on the short- and long-term problems lockdowns and widespread unemployment bring.

From supporting businesses, to individuals, action has been required at the top level, whether it is with bailing out the airline industry, saving jobs, central bank intervention or providing unemployment checks.

The economic disruption of the coronavirus is comparable to the havoc wrought by the global financial crisis in 2007 and 2008, and will be at the forefront of voters' minds when they go to the polls in November.

This election cycle, Trump's economic track record is also under the microscope, with economists evaluating his time in office and the effect some of his policies have had, from tax to stimulus, on the American people.

The Quote

"Trump has been an economic disaster," Nobel Prize-winning economist Joseph Stiglitz told Spanish newspaper El País.

"Remember that Trump reduced taxes for billionaires and companies in December 2017 and, in the same law, raised them for most of the people in the middle, which is the one who has been struggling in the last 40 years," he continued. "What Biden has promised is to reverse this and make companies and large fortunes pay fair taxes, which I think is good economic policy. The 2017 tax cut gave the economy a sugar boost, but any economic model will tell you that this is not sustainable, that it will lead to record deficits."

Why it Matters

The economy is one of the most important issues for voters, according to recent polls, and could be a deciding factor in the November 3 election.

A Gallup poll conducted in October found that nearly nine in 10 registered voters considered the presidential candidates' positions on the economy "extremely" (44 percent) or "very" (45 percent) important to their vote.

Alongside this, polling by the Financial Times released this week showed that more Americans believe the president's economic policies are hurting rather than helping the recovery. This was a significant drop-off since the start of the pandemic.

The Counterpoint

Trump maintains he has a solid economic track record citing markets as a vote of confidence in his leadership and a barometer of economic success. Stocks have continued to go up during his time in office.

The S&P 500 and Nasdaq have both reached record levels in recent weeks, and are sensitive to comments from both Trump and Federal Reserve chairman Jerome Powell.

As well as this, Trump has done comparatively well with some metrics, including the fact that the unemployment rate has improved from the dire levels of April under his presidency. Employment is now comparable to the levels seen at the same point of the Obama administration in his first term in office, before he was reelected.

"We had such a strong foundation that we're recovering much faster than anybody anticipated," President Trump said of the economy at a recent news conference.

When it comes to tax, the difference in the two candidates' economic proposals split along party lines, as Trump promises more tax cuts and lighter regulation, while Biden pledges higher taxes and higher government spending on social welfare.

Comparing the candidates' policies is difficult as Biden has offered up detailed plans, whereas Trump issued a set of bullet points with few specifics.

Some experts say that Biden's pledges don't add up, whereas it's difficult to tell whether Trump's do or not, given the lack of granular detail.

Joseph Stiglitz
Joseph Stiglitz during of Laurea Honoris Causa Joseph Stiglitz on the Festival della Tecnologia on November 07, 2019 in Turin, Italy. Nobel prize winner Stiglitz has been a vocal critic during Trump's time in office. Stefano Guidi/Getty Images for Polito di Torino