Back when Donald Trump was just a lowly real estate tycoon and not the leader of the free world, he had a habit of continually sparring over the size of his fortune from those who sought to emasculate him by way net worth underestimation. At one point the dispute even turned into a full-blown legal concern, as Trump found himself deposed by lawyers for journalist Tim O'Brien, who was defending himself from Trump's libel charges. An exchange:
Trump: My net worth fluctuates, and it goes up and down with the markets and with attitudes and with feelings, even my own feelings, but I try.
[Attorney Andrew] Ceresney: Let me just understand that a little. You said your net worth goes up and down based upon your own feelings?
Trump: Yes, even my own feelings, as to where the world is, where the world is going, and that can change rapidly from day to day ...
Ceresney: When you publicly state a net worth number, what do you base that number on?
Trump: I would say it's my general attitude at the time that the question may be asked. And as I say, it varies.
Now Trump is applying that same trademark combination of hyperbole and hand-waving to America writ large. With White House economic projections due in the coming weeks, Trump's fine-tuned machine of an administration is taking an impressionistic approach to coming up with growth estimates. The WSJ reports:
The Trump administration has drafted preliminary economic growth forecasts in its federal budget planning that rely on assumptions that are far rosier than projections made by independent agencies and most private forecasters, according to several people familiar with the discussions.
The forecasts are being revised, these people said, following an internal debate. One concern is that pressing staff economists to produce aggressive forecasts might undercut the credibility of top appointees forced to later defend those numbers.
Ten-year growth estimates of 1.8-1.9 percent proffered by the Fed and CBO clearly don't meet the great-again threshold. So, in the face of growth headwinds like an aging population, a declining labor force, plateauing educational attainment and proposed immigration limits, Trump's team is pressing ahead with estimates that reportedly top out at 3.5 percent.
To get there the administration is taking an unusual approach. Typically, the White House builds its projections on top of a baseline forecast provided by technocrats at the CEA. Though it's a political document, to be sure – Obama's projections were notoriously overoptimistic – at least nominally, such projections are rooted in mainstream economics.
But like women over 30 and steaks undercooked, mainstream economics isn't exactly Trump's thing. The president has demoted the CEA and left its top position empty. And that's not all:
Discussions for the Trump administration unfolded differently, with transition officials telling the CEA staff the growth targets that their budget would produce and asking them to backfill other estimates off those figures.
Find a nice big round number – 3.5 percent, $10 billion, whatever – and let the finer points work themselves out. It's kind of like The Secret. Establishment economists might shake their heads at all this, but the real question is whether the Trump administration will take the same approach the first time the Bureau of Labor Statistics brings the Donald an unflattering jobs picture, or the Bureau of Economic Analysis presents a flaccid GDP figure.
For an idea of what that might look like, let's return to that 2005 deposition, this time in reference to the business performance of Trump's golf courses:
Ceresney: Have you ever done a projection as to how much you anticipate you will profit on these courses over time in light of the contributions that you're making in cash?
Trump: Yes, I've done mental projections.
Ceresney: Mental projections?
Ceresney: These are projections that you've done in your head?
Feel comforted yet?