Politics, Moderate



Trump thinks rising stock prices mean his presidency is awesome. He's wrong.

Catherine Rampell on

Second, markets can also fall, making it super risky to tie your administration's success to stock prices.

Stock prices have been rising fairly consistently since March 2009, meaning we're already in the second-longest bull market on record. It ain't gonna last forever. What happens when, inevitably, things go south?

Perhaps Trump plans to start calling market data "fake" if trends turn inconvenient for him, just as he did with unemployment data.

Third, if the media were to judge presidents by stock performance, Obama would actually look better than Trump.

From Obama's inauguration to Jan. 8 of the following year, the S&P 500 went up 42 percent; during the same period of Trump's presidency, it's gone up half that, at 21 percent. As for the Dow Jones Industrial Average, the numbers were 34 percent vs. 28 percent, respectively. (Note: For lots of reasons, the S&P 500 is more representative of the U.S. stock market than the 30-company Dow Jones Industrial Average. For example, the Dow is price-weighted, and a single expensive stock can cause big swings.)

It would be silly, though, to credit Obama for the bounce back following the Great Recession. Just as it would be silly to credit Trump for the tail winds he inherited from the Obama years, even before tax cuts passed.

Markets do what markets do, and it's often difficult to explain why. There's a reason they're dubbed "animal spirits." Trump, perhaps the most animalistic of spirits, may think his constant puffery is boosting markets. And perhaps it has had an effect. But his ever-changing threats of trade wars, government shutdowns and nuclear apocalypse could arguably be making investors more nervous, too.

Finally, a point that hasn't received enough attention: U.S. stock values may be up, but they're up more in the (BEG IAL)rest of the developed world than they are here.

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As noted, the S&P 500 is up about 21 percent since Trump took office. Now look at MSCI's index of securities in developed countries across Europe, the Middle East, Asia and the Pacific (i.e., excluding North America). That's up 22 percent, just a hair higher.

If Trump's economic platform is truly single-handedly responsible for stock market gains, it's hard to explain why it would benefit the rest of the developed world more than it benefits us.

Especially if you adopt Trump's "America First" view of the global economy as essentially zero-sum.

The point isn't that U.S. equities are doing badly. They're doing quite well. They're just not anomalous. We're in a bull market that long predates this administration. Given that, plus the global context, it's ridiculous -- and risky -- for Trump to use stocks as a benchmark of his administration's success.


Catherine Rampell's email address is crampell@washpost.com. Follow her on Twitter, @crampell.

(c) 2018, Washington Post Writers Group


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