Donald Trump took to Twitter on Wednesday morning to deliver some post-game “analysis” after another Democratic debate which, generally speaking, delivered more of the same and underscored the desirability of cutting the field down to the four or five presidential candidates that actually have a chance.
If you ask the current president, “there is NO WAY that any of the Democrat Candidates that we witnessed last night could possibly become President of the United States”.
Normally, when someone makes such a definitive statement, it’s accompanied by evidence, but this is Trump we’re talking about, so instead, he employed one of the oldest tricks in the book – he simply suggested that if you don’t know why his assessment is correct, you’re an idiot. “Now you see why they have no choice but to push a totally illegal & absurd Impeachment of one of the most successful Presidents!”, he exclaimed.
But that wasn’t the “best” part of the president’s opening barrage of tweets on Wednesday.
About 20 minutes later, Trump said this:
Our record Economy would CRASH, just like in 1929, if any of those clowns became President!
This is a truly despicable tactic for a number of reasons, but it also speaks to a certain desperation. For months, the administration has been worried that the economy might roll over in the face of the trade war, and growth has likely slowed below 2%.
Whenever the president resorts to that kind of economic fearmongering, it’s important to remember that although the Trump economy was somewhat robust early on, there has never been anything anomalous or “tremendous” or miraculous about it. Here is the reality:
Trump’s economy is in the purple-dashed square. As you can see, there has not been an economic renaissance in America. If you wrote down every quarterly, annualized GDP print on individual pieces of paper and arranged them at random on a table top, it would be impossible to point to Trump’s numbers. They wouldn’t stick out at all.
Also, the manufacturing economy he promised to make “great again” is probably in a recession (blue line in the chart). The factory downturn in the US may prove fleeting, but for now it just is what it is.
As for the president’s stock market obsession, his supply-side policies did, in fact, bolster corporate bottom lines and encourage buybacks, which helped to turbocharge equities in 2017. The fiscal impulse also insulated US stocks from tumult abroad in 2018.
But, don’t forget that Trump presided over the worst year for the S&P since the crisis (2018). His government shutdown threat and incessant Twitter bombast aimed at Jerome Powell also contributed to the worst December for Wall Street since the Great Depression. Trump has overseen three of the worst five months for US stocks since early 2009.
None of the above is to suggest that Trump’s economic record (or market record) is bad – it’s not.
Rather, it’s simply to say that the president’s declarations about the economy and about US equities are grossly exaggerated and bear almost no resemblance to reality.
The irony in all of this is that if you’re looking for who to thank (or blame, depending on what it is you’re talking about) for things like record low unemployment (on the positive side) or the October and December 2018 market crashes (on the negative side), you could very easily argue that none of it has anything to do with Trump at all.
The president clearly understands that, otherwise he wouldn’t spend so much time tweeting about Powell and the Fed.