Victor Davis Hanson: Democrats Say the Economy Is Sinking. The Numbers Say Otherwise

SPEAKER_1 (0:00)

Welcome to the Daily Signal Podcast, where we provide intelligence for the intelligent. Now, without further ado, here's today's take.

Victor Davis Hanson (0:08)

And yet here we are four weeks before the midterms, and we hear affordability, affordability, affordability from the Democrats. And Trump did it, Trump did it, Trump did it. It's time to spend the money in the Republican war chest, all of it, get the message out, get people to get out and vote, and explain what happened under Biden and what the remedies are under Trump. And they can still win the midterms if they do that.

Hello, this is Victor Davis Hanson for The Daily Signal. You think it's possible that we're on the edge of a boom and we don't even know it, and we're not in a recession or a downturn or the doom and gloom as the left and the Democrats have told us and assured us four weeks before the midterm? I'm kind of worried about that because as I'd mentioned earlier, that happened in 1992 There had been a recession in 1991, partly due to the Gulf War that had disrupted oil supplies. That sounds familiar. And Saddam, remember, Hussein had torched the Kuwaiti oil field. But by the time of the November election, that recession had been over for 20 months. And the George HW. Bush economy was pretty good. They were still dealing with 7% unemployment. But the inflation was below 3%.

The stock market had gone up 8%.

The GDP was 3%.

All the indicators were showing a robust recovery. In fact, that year, the GDP would be higher than the next year when Clinton-Gork took over. So what happened? Well, what happened is a couple of things. Of course, there was Ross Perot that affected the Bush vote. He took 19% of the vote, as I had mentioned earlier.

And then there was the death of Lee Atwater. He was a tough, no-prisoners taken politico, and he had died of a brain tumor at 40 And had he been there, he would have stressed the Bush economic record and contrasted it with what Ronald Reagan earlier had inherited from Jimmy Carter. But he wasn't there. And so, the new team played by the Marcus of Queensberry's rules, they would rather, I guess, lose nobly than win ugly. And so, the result of it was they had this strong economy, but as they headed into the 1992 election, Al Gore said it was the worst recession. Remember, the recession had been over for 20 months since the Great Depression. Clinton echoed that every campaign stop. Carvel said famously, it's the economy's stupid. And they lost, they being the Bush ticket loss. It was an incumbent. It had a great record in foreign policy. Even they had won the Gulf War with very little cost. The Berlin Wall had fallen. He had managed the post-Cold War era very well. But he let the left take a hold of the narrative that everything was terrible, even when the economic indicators had shown that the war and oil-induced recession was long gone. I'm afraid something has happened here. Democrats say, affordability, affordability, everything's terrible, we can't afford anything. But when you actually look at what's happened, it's not true. The Federal Reserve Bank in Atlanta said that in the third quarter, they think when they revise their statistics, the economy will have grown by 5% GDP. That's astounding.

Standard and poor's stock indices for the year are over 10%.

So is the Dow Jones.

We just had 160,000 new jobs. New jobs were created in the month of August. The unemployment rate is only 4.2%.

And the Wall Street Journal just reported that in terms of new business orders and social service orders, each month keeps getting better. The month of August saw market increase and new purchases of computers, communications, metals, apply, everything.

There is no bad news except one issue. The Democrats have framed it affordability. And if that would be true, if that is really true, why did per capita income and per family income reach an all-time historical high in 2025? And why did, for example, equally, why did the poverty rate go down to an unknown, never seen before, about 10% of the population? 90% of the population is out, is much higher incomes and record incomes than the 10% of the poor. It's an astounding business extravaganza, renaissance, but we're not hearing anything about it. And it's a result of massive deregulation, 400,000 jobs cut in the bureaucracy, closing the border, deporting 2 to 3 million people, encouraging jobs for Americans only, targeted tariffs, despite what everybody says, targeted tariffs, record oil and gas production that got us through the war without $200 a barrel oil, and a sense that the world wants to invest in the United States, that there's $10, $11 trillion of new investment. But why didn't the Republicans, why aren't they addressing this affordability issue? That's what the Democrats say is the problem. Well, to the degree that prices are expensive, it was because a year and a half ago, Joe Biden finished his term with 21 percent aggregate inflation. When you look at the things that people care most about housing, vehicles, insurance, food, health care, prices in that mere four years went up 30 percent. Altogether, inflation average 5.1 percent during his tenure. So when the Trump administration came in, and by the way, during his first term, four years, Trump's yearly average was only 40 percent of Biden's inflation, just 2 percent. And when he came in, it was a little bit, his first year has been a little over 2 percent. Now, of course, the war and the oil crisis will raise that a little bit, but probably this year inflation will be below 3 percent. But why haven't the Republicans just sat down with the American people and said, we inherited 21 percent inflation and 30 percent on what you care most about? How do we stop that? We stop the rate of inflation. We slow it down so that you're not paying 5.1 percent every year for generally everything, but especially 6 or 7 or 8 percent for what you care most about. We've already cut that in half. When this war is over and oil is glutting the market, we will do even better. But the affordability issue that the Democrats are claiming is our fault was, we inherited it and more importantly, the only way to get back to where Donald Trump was in his first term would be to have a recession, a radical deflationary economy that receded and all of the Biden inflation. But the economy couldn't take a 20 to 30 percent cut in prices to make up for the inflation of the Biden years. All we can do is two things, cut the inflation rate radically and they're doing that, and increase wages. In the first year of the Trump term, wages rose higher than inflation.