The stock market is up “very, very big today” and the “tax cuts are really kicking in far beyond what anyone thought,” President Trump said last week, making an illogical cause-and-effect connection between the two. He also touted the latest jobs report. During the week, he claimed the gain in market value was due to his actions over the first seven months of his presidency and also asserted he was reducing debt. Fake news. Fake news.
Yes, the stock market hit new highs last year and every day of the first week of the new year. And, yes, according to one index, unemployment went down to 4.1 percent. But let’s pull back the curtain on the data that the President hails to create the world according to Donald Trump.
If you have money in the market, you doubtless feel pretty good about the Dow, up 25 percent for equities last year. And it’s not just the ultra rich who have a stake in the market. Thirty-two percent of workers have 401K’s through their employers and 15 percent have IRA’s. However, some 45 percent of working households have no retirement savings. And it’s the wealthiest ten percent of the population who own 90 percent of all the stocks and benefit from this metric of Trump’s self-proclaimed success.
Whatever President is in office, he will take credit for any good economic news. In 2016, candidate Donald Trump derided as “totally fiction” the five percent unemployment asserted by the Obama administration, claiming the real rate was 42 percent if you counted people underemployed or those who had dropped out of the workforce altogether. This was a wild exaggeration, but taking those factors into consideration, the real unemployment under Obama was probably more than 11 percent, more than twice the rate credited.
Now that Donald Trump is President, he is happy to embrace the announcement of 4.1 percent unemployment. Suddenly, underemployment (the “marginally attached”) no longer matters; nor do the many who have just given up looking for work. Including these numbers would push unemployment under Trump more than eight percent.
Labor force participation is now at 62.7 percent, slightly down from when Trump was inaugurated, and wages have grown just 60 cents an hour at a time when the economy is booming.
Trump campaigned on a pledge to increase manufacturing and coal industry jobs. Both of these are up 1.6 percent in the last year, not bad but definitely not great. Meanwhile, the trade deficit in the same period increased more than ten percent, and the budget deficit has also gone up. These two deficits have not made it into Trump’s tweets.
Many of today’s data points are trending in the right direction but point to a recovery that began under Barack Obama and is continuing under Donald Trump. When an inevitable market correction comes, perhaps later this year, will Trump embrace the downturn as his own. Let’s stick to the facts, Mr. President.
Most presidents bend the facts or use them selectively to shape their message. But, let’s remember, it was Donald Trump who proudly embraced the usefulness of mendacity as “truthful hyperbole” in his book The Art of the Deal. And he has told an unprecedented number of outright lies (and here they are).
When Trump hears news stories he doesn’t like, it’s “lies, just lies” or “fake news.” To his unqualified self-congratulatory views of his role in the economy, I just say “it’s sad. so sad.”
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