Throughout his first two years in office, whenever Trump wants to prove his worth, he had one place to point: the Dow Jones Industrial Average. No fewer than 81 times, Trump has taken to his Twitter account with some claim about a “record day” on Wall Street or “a new high” for stocks. Naturally, Trump ignored the fact that the market had trended up through both terms of Barack Obama’s presidency, ending his presidency 250 percent higher than when he took office. Trump was particularly proud of market gains after Republicans passed their big tax-cut package in November 2017—a bill that was designed specifically to benefit corporations and wealthy investors.
And then … a funny thing happened. While the Dow did jump on the news of the tax cuts, moving from 23,500 all the way to a peak of 26,700 in September of 2018, it then started to fall. By October, Trump was forced to tweet that the markets were “taking a little pause,” by which he meant they were down over 1,000 points. And by November … in November of 2018, Trump stopped tweeting about the markets. And for good reason: By that point, the market had surrendered all its gains for the year. By the start of 2019, the stock market was below where it was when Republicans passed their tax bill.
The stock market returned to Trump’s tweets on Friday morning, but only so that he could blame Democratic victory in the election for “disruption to the Financial Markets.” Only … that’s not how the markets see it. As CNN Business reports, the Dow plummeted again on Thursday after Apple temporarily suspended trading in its own stock and announced that it would miss previously reported revenue targets. But Apple wasn’t alone. Reports rolled out on Thursday showing that production at American factories dropped more steeply last month than at any time since the crash in 2008.
That’s not because of Democrats. It’s not because people are just getting tired of buying new smartphones. It’s because of one big problem that is roiling the economy:
The closely-watched ISM manufacturing index tumbled to a two-year low, providing further evidence of slowing growth and pain from the US-China trade war. ISM said manufacturing activity is still growing, but suffered a "sharp decline" last month.
Trump has stated that trade wars are “good” and “easy to win.” In fact, he even tweeted that “you can’t lose a Trade War!” But Trump finds a way.
The stock market is not, and was not, a good indicator of the overall economy. But the problem for Trump, and the Republicans, is that it’s the only part of the economy they’ve ever cared about. Decades of stagnant wages, falling employment, and rising inequality were all cool, so long as stocks were rising. Because while ordinary workers, like the 800,000 government employees currently at the mercy of Trump’s “I don’t want to look bad in front of Rush” shutdown, are dependent on their salaries to get by, those at the top of the wealth pyramid hold almost all of their wealth in stocks and bonds.
The stock market numbers, and particularly the Dow index, aren’t a good marker for the economy. But they’re a good marker for how Trump is doing for the people who invested billions in the Republican Party. And Trump is screwing that up.
It’s really quite amazing. The Republican tax cut injected trillions of dollars directly into the veins of wealthy corporations and investors, but even that wasn’t enough to hold off the genuinely miserable job that Trump has done in every aspect of the government’s business. In particular, his complete inability to understand international trade, and his insistence on trying to bludgeon nations and groups of nations with the tactics of a playground bully, are such sterling examples of incompetence that they genuinely threaten to end a decade of global economic growth.
George W. Bush and Republicans in Congress allowed the U.S. economy to fall into a ditch through deregulation of economic markets that encouraged the creation of speculative instruments that ballooned to levels that literally exceeded global GDP. But Donald Trump is deliberately sinking the world economy through the direct implementation of simple—and simply wrong—kindergarten-level economic theories. Trump has already provided a bailout for farmers hurt by his policies. But his checkbook isn’t big enough to cover the broader damage that until recently has been hidden behind the fading glow of the money Republicans threw at corporate leaders with their tax gift. In fact, cutting any checks at all is going to be tough, since Trump has racked up more than two trillion in fresh debt.
Markets on Friday morning edged upward on news that the U.S. and China were going to meet for another round of trade talks. It’s likely that eventually Trump will accede to a deal that’s so similar to the previous deal as to be indistinguishable, then declare victory. It’s what he did with NAFTA, where the result of Trump putting the North American economy on hold wasn’t so much a NAFTA 2.0 as a NAFTA 1.01. Until then, other countries will continue to sign on to deals that build up new allegiances, leaving American companies, and consumers, sidelined.
The corporate sugar rush that Republicans provided with their tax cut is all spent. Now there’s nothing left but Trump, and the markets are finding him just as bitter as anyone who ever depended on him for a business deal ever did.