Rallying as Dow dives
Networks switch to stocks as Trump touts tax cuts
WASHINGTON — As President Donald Trump was taking credit in Ohio on Monday for the economic benefits his tax-cut package brought to working families and their employers, the stock market took a dive. After briefly dropping nearly 1,600 points, the Dow Jones
industrial average recovered somewhat to close down 1,175 points — its biggest one-day point drop ever.
The timing did not work in Trump’s favor. As the president addressed employees at Sheffer Corp. outside Cincinnati and called a couple of workers to join him onstage to say how they would spend their tax savings and bonuses, CNN, MSNBC and Fox News cut to business desks where anchors and reporters were trying to figure out whether the drop was a simple market correction or worse.
Trump frequently com
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plains he does not get enough credit for the U.S. economy, including considerable gains in the stock market since he won election in November 2016. (Marketwatch reported Trump enjoyed the largest first-year gain in stocks since 1945.)
But because the “fake news” media do not duly recognize that, he says, he has regularly gone on Twitter to tout the economy under his watch.
No tweets amid sell-off
Monday’s stock market plunge — which followed a drop of nearly 666 points on Friday — erased the Dow’s gains for 2018. That did not merit a mention on Trump’s Twitter feed.
Before Trump and first lady Melania Trump returned to the White House, the press office released this statement: “The president’s focus is on our long-term economic fundamentals, which remain exceptionally strong. … The president’s tax cuts and regulatory reforms will further enhance the U.S. economy and continue to increase prosperity for the American people.”
Henry Olsen, author of “The Working Class Republican: Ronald Reagan and the Return of Blue-collar Conservatism,” has seen this phenomenon before, and he says it
can end well.
“The Dow dropped almost 23 percent on October 19, 1987, its biggest one-day drop (by percentage) ever. A year later, the president’s V.P., George H.W. Bush, was elected president, and the Dow had regained its losses by January 1989. Trump should keep calm and carry on,” Olsen said.
Likewise billionaire Mark Cuban, who has flirted with challenging Trump in 2020, told Fox Business News he is not nervous. “When you have a run-up like we’ve had since the election, you know, markets don’t go in a straight line forever,” Cuban said. “Something had to happen. It was just a question of what and when and how much.”
In the past, politicians who painted too rosy a picture of the economy have paid a price for their optimism. When GOP presidential nominee John Mccain said the economy was “fundamentally sound” in 2008 after the bankruptcy declaration of Lehman Brothers amid financial turmoil, he opened himself to ridicule.
But GOP strategist and CNN contributor Alice Stewart said it’s “premature to make this a statement on Trump’s influence on the economy.”
“You have to look at the big factor of why the market went down. A lot of it went to inflation concerns,” said Stewart, noting she’s not an economist.
If she were advising Trump, Stewart told the Las Vegas Review-journal,
she would tell him “he should focus on the positive, which is good unemployment numbers, focus on jobs, the positive aspects of the tax reform effort.”
An argument turned on its head
Larry Summers, who was Treasury secretary under former President Bill Clinton and head of the National Economic Council under Barack Obama, had a different take. “President @ realdonaldtrump took credit for the stock market rally. Therefore, it’s fair when people assign him responsibility for the decline,” Summers tweeted.
Later Summers tweeted, “Not just @POTUS @realdonaldtrump but also key advisers who should know better (were) wrapping themselves in stock market. Gary Cohn predicted big rally just 6 weeks ago.”
While the market was sliding Monday, the president was chiding congressional Democrats for failing
to applaud during his State of the Union address last week.
During his speech in Ohio, Trump recalled that Republicans were “going totally crazy, wild.” But on the other side of the aisle, “even on positive news — really positive news like that — they were like death and un-american,” Trump said.
The president also mused, “Somebody said ‘treasonous.’ I mean, yeah, I guess. why not?”
Not the right tack, Summers warned. “Especially when markets are way uncertain, very dangerous for @POTUS @realdonaldtrump to be calling his political opponents treasonous. Dangerous and irresponsible and has to raise unease in markets,” he tweeted.
Contact Debra J. Saunders at dsaunders@reviewjournal. com or 202-662-7391. Follow @ Debrajsaunders on Twitter.