It was just two months ago when Donald Trump pointed to Wall Street as proof of how successful his presidency has been. "The stock market is at an all-time high," he boasted. "Think of that -- over 50 percent since my election. Fifty percent. People -- the 401(k)s -- and they have 401(k)s, and they were dying with them for years. Now they're so happy."
A lot can change in a couple of months.
Two benchmark U.S. stock indexes are careening toward a historically bad December.Both the Dow Jones Industrial Average and the S&P 500 are on pace for their worst December performance since 1931, when stocks were battered during the Great Depression. The Dow and S&P 500 are down 7.8 percent and 7.6 percent this month, respectively.
Wall Street's major indexes are in negative territory for the year. The S&P 500 is up about 12% since Trump took office, not 50%.
On Nov. 17, 2017, as the fight over the Republican tax plan was heating up in Congress, the president published a tweet that read, "Great numbers on Stocks and the Economy. If we get Tax Cuts and Reform, we'll really see some great results!"
Since that day, the S&P 500 is down 1.5% -- despite the fact that the GOP passed its regressive tax breaks.
Complicating matters for the president, Catherine Rampell noted yesterday that the stock market's performance under Obama was vastly better than it's been under Trump at comparable points in their respective presidencies.
A recent Washington Post analysis added:
It used to be that Trump heralded the movement of the markets as validation of his expertise on the economy. Over the course of 2017, Trump tweeted about the stock markets scores of times, always in laudatory terms. His adviser Kellyanne Conway, at one point early in his administration, pronounced that a record close on the Dow Jones industrial average reflected that "markets continue to like the policies, action and vision" of Trump. When Republicans passed a bill cutting corporate taxes last December, Trump promised it was going to goose markets higher.But over the course of 2018, that hasn't happened. [...]Not only did Trump celebrate market gains as proof of his effectiveness last year, he also used stock prices to criticize Barack Obama during his predecessor's administration.
And that's ultimately the politically salient point of all of this. As we discussed nearly a year ago, Trump has long seen the markets as a real-time barometer of his record. When Wall Street does well, it meant he’s doing well. When stocks values look good, it meant the value of his presidency looks good.
The posture was rooted in misguided assumptions. Not only are there important differences between the stock market and the economy, but Trump apparently worked from the assumption that the major indexes only move in one direction.
Oops.
Circling back to our previous coverage, I think it’s important not to respond to market dips in lazy and/or partisan ways. In the Obama era, Trump and his allies used to respond to even modest drops on Wall Street as proof that the Democratic White House was failing.
The line of argument proved to be ridiculous, not only because the stock market’s performance over the course of Obama’s presidency was very strong, but also because blaming short-term Wall Street trends on the White House is foolish.
The trouble, however, is that Trump has gone out of his way to take credit for stock market gains. It apparently never occurred to him that would mean taking responsibility when stock values started to decline.
Jay Carney, one of the Obama-era White House press secretaries, noted a while back that it’s a “good time to recall that in the previous administration, we NEVER boasted about the stock market – even though the Dow more than doubled on Obama’s watch – because we knew two things: 1) the stock market is not the economy; and 2) if you claim the rise, you own the fall.”