The facts about Trump and the Stock Market

The president points to the stock market as an indicator of his success.  The plot shows stock prices as quantified by the S&P 500 index by date starting at the end of George W. Bush’s administration.  The data is widely available and undisputed.

Short-term fluctuations are fueled by rumors, unexpected world events, natural disasters, etc.  Longer term large and enduring changes reflect fundamental economic shifts.  For example, the collapse of the mortgage markets a decade ago led to a significant long-term drop in the S&P 500.  In response, the Bush administration enacted the Troubled Asset Relief Program (TARP) on October 3, 2008 and the Obama administration’s American Recovery and Reinvestment Act (ARRA) became effective on February 17, 2009.  TARP targeted institutions while ARRA focused on saving and creating jobs by investing in infrastructure, education, health, and renewable energy.  The sustained recovery of the markets bolsters the claim that TARP and ARRA were effective, though this data alone is not proof.

The blue trend line shows strong growth in stock valuations since Obama’s first inauguration on January 20, 2009, an eight-year, 16% annually-compounded growth rate, reflecting a healthy economy under Obama.  Based on Trump’s own emphasis on the performance of the stock market as a measure of success, calling Obama a disaster on economic policy is a blatant lie.

When Obama was re-elected, Trump Tweeted “The stock market and US dollar are both plunging today. Welcome to @BarackObama’s second term.”  Trump’s implication that Obama’s re-election was the start of an economic downturn was wrong again; the S&P 500 soared over the two following years.  The red line shows the average slope.  After a hiccup for less than a year, the stock market again rose steadily at the same rate.

On August 3rd Trump tweeted, “Business is looking better than ever with business enthusiasm at record levels. Stock Market at an all-time high. That doesn't just happen!”  The market did hit an all-time high, but the rate of increase is the same now as it had been over the previous two years. Trump’s presidency has not accelerated growth in the equity markets.

A tweet on October 11, 2017 stated, “It would be really nice if the Fake News Media would report the virtually unprecedented Stock Market growth since the election.  Need tax cuts” The stock market’s performance has been reported by every major news outlet, but its rate of growth is not unprecedented and its trajectory has not changed with Trump on the scene, which the mainstream news media reports accurately to Trump’s chagrin.

The president uses his “success” to bolster his economic credentials to argue for his tax cut plan.  In formulating tax policy, we can’t just trust Trump.  The weekly wages of blue-collar workers fell after the Reagan tax cuts and remain weak to today and recent growing corporate profits and availability of capital have barely increased worker wages.  The congressional Budget Office estimates a $1.7 trillion dollar deficit in the republican tax overhaul plan. Trump needs to provide evidence for his assertions to earn broader support.

Trump is right that stock valuations rise if regulations are lifted to increase profitability of companies.  However, profits over the next couple of years are not worth the cost of long-term irreversible harm.  He is proud of the GDP’s growth even through a damaging hurricane, but his climate policies will lead to more severe weather in the future, adversely affecting long-term productivity.  Addressing climate change is an economic necessity.

Society must identify its priorities and desired outcomes through healthy debate.  Then policies for getting results need to be intelligently crafted and based on facts.  Legislative action should be taken only after proposed bills survive public scrutiny and pass objective measures of effectiveness.

Rather than presiding over debate informed by careful analysis of the facts, Trump and his cohorts stifle dissent, cherry pick the data and misrepresent the facts.  As a result, the current tax plan is not well thought out and is being rushed through for a vote even though it is greatly flawed.  Our country needs further deliberations to pass responsible tax reform that affects needed change.

Trump just wants a legislative win, regardless of the consequences.

Sad.

The Rise of a Dictator

Writing puts ideas into a visual form, aiding the writer in clarifying his or her thoughts.  The written word is also an efficient means for transmitting information that is well suited to contemplation.  In contrast, Trump tweets and arouses his followers by yanking at their emotional strings, blinding them to reason.  It matters little to them that much of what Trump says is utter nonsense that often contradicts his own recorded words from the past.  There is no need to consult the "crooked" media.  One can easily verify Trump's duplicitousness through his Twitter feed or recordings of his own words that can be found across the internet.

Trump spews many lies. Each one demands a rebuttal that is grounded in fact and an analysis that through logic illustrates the dangerous consequences of his intended actions.  Unfortunately, the sheer volume of lies and inaccuracies makes it impossible to have a true discourse that leads to effective policies.

Each day, I intend to write about his most crazy utterance, but there are just too many of them to keep up.  So instead, I decided to let off some steam by writing this post.

I feel that it is in the best interest of us all to preserve our democracy -- a precious but fragile gift.  Democracy allowed Trump to win, and our citizenry deserves a chance to vote Trump out of office in four years if his actions fail to enrich our society.

In closing, below I have produced a list of techniques needed to become a dictator.  How many of these has Trump used and how far down the list will he get?

• 1. Use fear to convince your population to give up its freedom for security
• 2. Identify a scapegoat group that you can blame for society's ills
• 3. Discredit the press to limit information, maximize disinformation, and prevent scrutiny of your actions.
• 4. Weaken the judiciary so that you can be above the law
• 5. Imprison the opposition
• 6. Surround yourself with miliary leaders that are loyal to you
• 7. Empower the police to control the population rather than protect it
• 8. When things go wrong, blame others and lie
• 9. Use your power to enrich yourself