Editor’s note: This is a lightly edited transcript of today’s video from Daily Signal senior contributor Victor Davis Hanson. Subscribe to our YouTube channel to see more of his videos.
Hello, this is Victor Davis Hanson for The Daily Signal.
Do 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 the Left and the Democrats have told us about and assured us of four weeks before the midterm?
I’m worried about that because, as I’d mentioned earlier, that happened in 1992. There had been a recession in 1990-91, partly due to the Gulf War that had disrupted oil supplies. That sounds familiar. And Saddam Hussein, remember, had torched the Kuwaiti oil fields.
But by the time of the November election, that recession had been over for 20 months, and the George H.W. Bush economy was pretty good. They were still dealing with 7% unemployment, but inflation was below 3%. The stock market had gone up 8%. GDP was 3%. All the indicators were showing a robust recovery. In fact, that year, GDP would be higher than the next year when Clinton-Gore 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. Had he been there, he would have stressed the Bush economic record and contrasted it with what Ronald Reagan had inherited earlier from Jimmy Carter.
But he wasn’t there, and so the new team played by the Marquess of Queensberry rules. They would rather, I guess, lose nobly than win ugly. And so, the result was that they had this strong economy, but as they headed into the 1992 election, Al Gore said it was the worst recession since the Great Depression. Remember, the recession had been over for 20 months. Bill Clinton echoed that at every campaign stop. Carville said famously, “It’s the economy, stupid.”
And they lost. The Bush ticket lost. 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 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, 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 of Atlanta said that in the third quarter, they think when they revise their statistics, the economy will have grown by the GDP. That’s astounding. Standard & 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 service orders, each month keeps getting better. The month of August saw marked increases in new purchases of computers, communications equipment, metals, appliances, everything.
There is no bad news except one issue. The Democrats have framed it as affordability. And if that were true, if that is really true, why did per capita income and per-family income reach an all-time historical high in 2025? And equally, why did the poverty rate go down to an unknown, never-seen-before level, about 10% of the population? Ninety percent of the population has much higher incomes and record incomes than the 10% who are poor.
It’s an astounding business extravaganza, a 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 million 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 trillion or $11 trillion of new investment.
But why aren’t the Republicans 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% aggregate inflation. And when you look at the things that people care most about, housing, vehicles, insurance, food, healthcare, prices in that mere four years went up 30%.
Altogether, inflation averaged 5.1% during his tenure. So when the Trump administration came in, and by the way, during his first term, Trump’s yearly average was only 40% of Biden’s inflation, just 2%.
And when he came in, his first years have been a little over 2%. Now, of course, the war and the oil crisis will raise that a little bit, but probably this year inflation will be below 3%.
But why haven’t the Republicans just sat down with the American people and said, “We inherited 21% inflation and 30% 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% every year for generally everything, but especially 6% or 7% or 8% for what you care most about. And we’ve already cut that in half. And 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, 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 rescinded all of the Biden inflation. But the economy couldn’t take a 20% to 30% 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.
What’s happening, then, is the same thing that happened in 1992. There was no recession. The economy had come out of it almost two years earlier. There were strong indications that things would get better. And the Democrats are doing the same thing now that they did then, and the Republicans are doing the same thing now that the Bush team did then.
They’re not replying and explaining the affordability issue, who is responsible for it, and then indicating all the good things that are happening, from business orders to service orders to poverty rates to income rates to GDP to inflation to the stock market, Standard & Poor’s, and the Dow Jones.
It’s all pretty good.
And more importantly, if they would do that, it would allow them to talk also about these foreign-policy successes.
The administration has flipped all of Latin America from an anti-American pink tide to a pro-capitalist, pro-Western, pro-American Western Hemisphere, where only five of 32 countries are left that are communist, socialist, anti-American.
The same thing is happening in the Middle East with the Gulf states and the moderate Arab regimes. If Iran’s regime falls within a year, it will be as tumultuous as the fall of the Berlin Wall. It will be the most significant foreign-policy achievement since 1989.
Our main antagonist, Russia, has bled 1.5 million people. Its economy is in shambles. It has lost its proxies in Syria, Venezuela, and Iran.
China has a GDP $10 trillion smaller than we do. It has a 1.0 fertility rate. Its economy is stagnant. Xi has, I don’t know what he did with them, but he got rid of about 80% of his top generals. It’s a society in crisis.
The United States is poised once again to be the most powerful economic, military, social, and cultural force in the world.
And yet here we are, four weeks before the midterms, and we hear affordability from the Democrats and 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.
We publish a variety of perspectives. Nothing written here is to be construed as representing the views of the Daily Signal.
Continue reading...
[ H/T The Daily Signal ]
