Perceptions Are That Trump's Policies Are Working

President Donald Trump

by Michael Barone: Perceptions matter. People make decisions, even life-altering decisions, based on what they perceive as likely to happen. To the extent that public policy affects such decisions, the perception of likely policy change can affect behavior even before the change happens — even if it ends up never happening.

Something like that seems to be happening in America — and around the world — in the two months since Donald Trump was inaugurated as president. People are making decisions based on perceptions of how he might change the country's direction.

Take the economy. The numbers in the jobs report for February, Trump's first full month in office, showing an increase of 235,000 jobs, are not wildly out of line with some monthly reports in recent years.

In contrast to the years of the Obama stimulus program, when the bulk of new jobs came in the public sector, it appears that the increase here is in the private sector. Moody's Analytics says there were 298,000 new private sector jobs in February, far more than the 189,000 it expected.

Construction jobs were up 58,000, private educational services jobs up 29,000, manufacturing jobs up 28,000. This suggests that lots of employers, small as well as large, are taking the plunge and creating new jobs.

Can I prove that they're doing so because of perceptions that regulations and taxes will be decreased by the Trump administration? No, and I'm not sure any economist's statistical model could either. But that sure looks like what's happening.

Big players in the financial markets seem to think so. Federal Reserve Chairman Janet Yellen suggested the Fed will raise interest rates twice after doing so this month. That's a significant shift from her longstanding reluctance to increase rates at all for fear of dampening the economy.

JPMorgan Chase CEO Jamie Dimon said Friday that Trump's program of cutting corporate taxes, building infrastructure and rolling back regulations has unleashed the "animal spirits" — economist John Maynard Keynes' phrase — of businessmen. "Even if he gets part of it done," Dimon, a Democrat and Hillary Clinton contributor, told Bloomberg News, "it'll be good for growth."

Does the unusual speed with which Paul Ryan is leading the House to vote on the first of three promised initiatives to repeal and replace Obamacare suggest that he — and Trump — are trying to strengthen the perception that the private sector economy will boom? Given the significant risk of political damage and policy bollix, it certainly looks like the answer is yes.
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Michael Barone (@MichaelBarone) is Senior Political Analyst for the Washington Examiner, co-author of The Almanac of American Politics and a contributor to Fox News.

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