Washington Macro Commentaries

Ahead of the Curve ™

Shelter From The Storm: Trump In Historical Context, Vol 3

Mar 28 2019

Report by Chris Krueger

 

13 data sets, 7 time-stamps, 6 Presidencies = historical context for current environment.

4 key takeaways: 1) Regulatory Rollback Resonating & Resilient (68% decline from last 2 Obama yrs & Trump’s first two); 2) Record Judges (1/6 of all appellates); 3) Staff Shakeup (Trump lost more Cabinet than previous 3 combined); 4) Trump approval HIGHER than Reagan at same point and close to Clinton & Obama.


‘Twas in another lifetime, one of toil and blood

When blackness was a virtue the road was full of mud

I came in from the wilderness, a creature void of form

Come in, she said

I’ll give ya shelter from the storm 

Six takeaways on historical benchmarks to find signals in the noise:

Regulation Rollback Resonating & Resilient. An “economically significant regulation” is defined as having an impact of over $100M. Obama’s final two years in office saw 155 economically significant rules; Trump’s first two years have a cumulative total of 50 – a 68% decline.

 

Going back to Reagan’s first full year, the average yearly number is 42: Trump’s first year saw 17 and 33 followed in the second. Keep in mind: it is not just the Trump Administration reducing regulations with a titanic pendulum shift. It is the elimination of four years of Hillary Clinton regulations that likely would have seen the chart move in the opposite direction.

 

And if I pass this way again, you can rest assured

I’ll always do my best for her, on that I give my word

In a world of steel-eyed death, and men who are fighting to be warm

Not a word was spoke between us, there was little risk involved

Everything up to that point had been left unresolved

Try imagining a place where it’s always safe and warm

 

The Federal Register is the repository of all rules and regulation issued by the Federal Government and serves as a proxy for Big Government. ~26% drop in the number of pages published in the Federal Register between Obama’s final two years and Trump’s first two years, which supports the “animal spirits” thesis post-election. “Animal Spirits” was popularized by Keynes and is used in this post-election context to explain the consumer confidence boost from a new, pro-business, pro-growth, de-regulatory White House. The difference between 2017 and 2018 was less than 10% (61,950 to 67,814). A slight uptick in 2018 though the numbers of pages published in 2018 is the second lowest (after 2017) since 2001.

I was burned out from exhaustion, buried in the hail

Poisoned in the bushes an’ blown out on the trail

Hunted like a crocodile, ravaged in the corn

Suddenly I turned around and she was standin’ there

With silver bracelets on her wrists and flowers in her hair

She walked up to me so gracefully and took my crown of thorns

Record Judges. In the first two years, Trump has confirmed 30 appellate judges – more than half of them on party-line votes. Within the first two years of his Presidency, 1/8 of all appellate judges in the U.S. are Trump nominees (it is now closer to 1/6 when you include Q1 2019 and will continue throughout the year). His two Supreme Court confirmations matches the Obama and Clinton levels in recent memory. When Trump took office in 2017, he had 124 federal judgeships to fill including 19 on federal appellate courts. Due largely to the age of many federal judges, the White House expects as many as 100 other appellate vacancies will emerge over the next two years that could give Trump the ability to appoint as many as 1/2 of all the appellate seats in the country.

Staff Shakeup. George W. Bush and Barack Obama averaged 473 confirmations in their first two years with 700 nominations. Trump is down 37% and 28%, respectively with 300 and 502. The main point we are driving at is not the delay and procrastination with these selections, which has got to rank as one of the greatest unforced errors of the Presidency thus far. Our main point is how much has been accomplished with so few. We would also point out that inaction is a form of action – by not filling jobs, agencies can atrophy by design. The policy downside to running the federal government with a skeleton crew is that departures have a magnifying impact on the bare bones of the bureaucracy. Trump has lost 13 Cabinet Secretaries in his first two years. That is more than his three previous predecessors – combined.

Now there’s a wall between us, somethin’ there’s been lost

I took too much for granted, I got my signals crossed

Just to think that it all began on an uneventful morn

Well, the deputy walks on hard nails and the preacher rides a mount

But nothing really matters much, it’s doom alone that counts

And the one-eyed undertaker, he blows a futile horn

On Legislation, It’s All Happening. Based off the nonpartisan Pew Research Congressional Tracker, Trump’s first two years saw more substantive legislation than any Congress since the 109th Congress that met in 2005 and 2006. The all-Republican Congress passed 306 substantive pieces of legislation, which is a near 12% increase from the previous single-party trifecta of the first Obama Congress from 2009 and 2010. These numbers somewhat mask the sheer size of the tax bill and last February’s ~$500B stimulus/sequester bill. Some final context: undoing a regulation and shrinking government can be as important as passing a new law to expand government. Many Republican lawmakers prefer to be judged on the “bad” legislation they prevented as opposed to the “good” legislation they passed.

Trump Approval Higher than Reagan at Similar Point. Trump no longer holds the record low approval for all seven timestamps; Trump’s 44% approval from January 31 of Year Three is almost his highest approval on record (and comes before the news on the Mueller Report) – and is higher than Ronald Reagan at the same point. Trump’s approval numbers at this point in his Presidency heading into re-election are HIGHER than Reagan’s and not dissimilar from both Clinton and Obama.

  • Trump remains the Steady Eddie of polling as the 2016 axiom holds: he has the highest floor but the lowest ceiling. The consistency of his approval ratings is unprecedented. The average spread between Election Day and the 1st Term midterms going back to Reagan is 25.4. Trump’s is NINE. This suggests that Trump’s re-elect strategy has to focus not on undecided voters because there really aren’t any – this is going to be about Trump continuing his course and getting his fervent supporters out to the polls.
  • Disapproval the New Approval. The other side of the coin – which may be the better indicator – is the Presidential Job Disapproval…and Trump has the record highs for the time stamps. The highest non-Trump disapproval (56% for Reagan) is only Trump’s second lowest! Trump’s approval within his own party were (surprisingly) middle of the pack. Both Bushes logged higher numbers, while Reagan, Clinton and Obama were all lower at this point in their presidencies.

I’ve heard newborn babies wailin’ like a mournin’ dove

And old men with broken teeth stranded without love

Do I understand your question, man, is it hopeless and forlorn

Thirteen data sets with seven benchmark dates on overlay for six Administrations: Ronald Reagan, George H.W. Bush, Bill Clinton, George W. Bush, Barack Obama, and Donald Trump.

Benchmark dates: 1) Election Day; 2) Inauguration Day; 3) August 1, 4) December 31, 5) January 31 (Year Two); 6) Midterm Election, and; 7) January 31 (Year Three)

Data sets: 1) Partisan Conflict Index (Philadelphia Federal Reserve); 2) Presidential Job Approval & Disapproval Numbers; 3) Midterm Election Outcome; 4) Regulation (Enacted/Rollback); 5) Substantive Legislation Passed (Pew Research Index Expansion); 6) Nominations, Judge and Revolving Door; 7) S&P 500 Index; 8) Unemployment Number; 9) Treasury 10-Year Yield, Deficit and Debt; 10) Consumer Confidence; 11) M&A Deals; 12) Trade and; 13) Special Prosecutor and Russian Investigation Time Frame.

In a little hilltop village, they gambled for my clothes

I bargained for salvation and she gave me a lethal dose

I offered up my innocence I got repaid with scorn

The market data sets over the past thirty years were not nearly the midterm, political predictor, or proof point we anticipated, though do serve as a historical goal post.

The opposite of hard market data is the prosecutorial sword of Damocles, which has impacted four of the past five Administrations. Two things stand out when looking at the previous history of Special Prosecutors (Iran-Contra, Whitewater, Valerie Plame Leak) – which Robert Mueller pretty much blew to shreds: 1) time (average length pre-Mueller investigation was ~5 years), and; 2) mission creep (another anomaly of Mueller who stayed very much in his mandated lane).

Well, I’m livin’ in a foreign country but I’m bound to cross the line

Beauty walks a razor’s edge, someday I’ll make it mine

If I could only turn back the clock to when God and her were born

Come in, she said

I’ll give ya shelter from the storm

SHOT
93% Approval Rating in the Republican Party. 52% Approval Rating overall! Not bad considering I get the most unfair (BAD) press in the history of presidential politics! And don’t forget the Witch Hunt!” –Presidential Statement delivered via @realDonaldTrump on February 24

…CHASER

“Look, we can bicker about this all night, but what’s done is done, Dad. Are you guys going to invest or not? That’s it!” –Dale Doback and Dr. Robert Doback discussing Prestige Worldwide, as played by John C. Reilly and Richard Jenkins, in Step Brothers

 

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