Self-in­ter­ested Trump changes his tune on un­em­ploy­ment and the stock mar­ket

The Washington Post Sunday - - NEWS -

“Look at how much African Amer­i­can com­mu­ni­ties are suf­fer­ing from Demo­cratic con­trol . . . . Fiftyeight per­cent of your youth is un­em­ployed; what the hell do you have to lose?”

— GOP can­di­date Don­ald Trump, rally in Di­mon­dale, Mich., Aug. 19, 2016

“I said, vote for me, what the hell have you got to lose, re­mem­ber that? The His­panic, the African Amer­i­can, the in­ner ci­ties. So now it just came out, African Amer­i­cans and teenagers are now en­joy­ing their low­est un­em­ploy­ment since just af­ter the turn of the mil­len­nium. That’s pretty good, right?”

— Pres­i­dent Trump, cam­paign rally in Youngstown, Ohio, July 25, 2017

We’ve dubbed Pres­i­dent Trump the “king of flip-flop­pers” be­cause of his ten­dency to re­peat­edly change his po­si­tion with­out ac­knowl­edg­ing that it’s the com­plete op­po­site of a pre­vi­ously held po­si­tion. We rec­og­nize that politi­cians some­times make a sin­cere evo­lu­tion on a pol­icy stance, es­pe­cially as new facts emerge or as the con­stituency that elected them to of­fice forms a new opin­ion on an is­sue. But it’s im­por­tant to ac­knowl­edge that this is a shift — which Trump never does.

Some­times the shift is so strik­ing that one won­ders if the change in po­si­tion is less tac­ti­cal than cyn­i­cal. We of­fer two case stud­ies: African Amer­i­can un­em­ploy­ment and the stock mar­ket.

African Amer­i­can em­ploy­ment

Dur­ing the cam­paign, the Fact Checker had long dis­cus­sions with the Trump cam­paign about the can­di­date’s use of a very strik­ing statis­tic — that 58 per­cent of African Amer­i­can youth was un­em­ployed. The of­fi­cial Bureau of La­bor Sta­tis­tics un­em­ploy­ment rate for black youth at the time was 19.2 per­cent — about one-third of the rate used by Trump.

How did Trump get his fig­ure? He was count­ing stu­dents who are not look­ing for work as a part of the “un­em­ployed” pop­u­la­tion. Tech­ni­cally, those stu­dents don’t have jobs. But that does not fit the def­i­ni­tion of “un­em­ployed” and is es­pe­cially prob­lem­atic for this age group, be­cause the num­ber of peo­ple who aren’t look­ing for jobs in­cludes peo­ple who are in school full time.

For in­stance, Trump was count­ing as “un­em­ployed” 16year-old high school sopho­mores, who were go­ing to school full time and en­gaged in ex­tracur­ric­u­lar ac­tiv­i­ties when not in school — and who were not look­ing for jobs. The method­ol­ogy — count­ing peo­ple as un­em­ployed when they were not look­ing for jobs — just seemed ab­surd.

Un­der Trump’s fuzzy cam­paign math, 49 per­cent of white youth were “un­em­ployed” — and so were nearly 64 per­cent of Asian youth.

The Trump cam­paign was very defensive about the fig­ure, in­sist­ing it was much more ac­cu­rate than the of­fi­cial un­em­ploy­ment rate. We, how­ever, ended up giv­ing Four Pinoc­chios for the claim.

Now that he’s pres­i­dent, Trump ap­pears all too happy to cite the un­em­ploy­ment rate for African Amer­i­cans, brag­ging that it’s the best since the turn of the cen­tury. The rate in June was 7.1 per­cent, the low­est since it hit 7 per­cent in April 2000 un­der Pres­i­dent Bill Clin­ton, ac­cord­ing to the BLS. (It in­creased slightly, to 7.4 per­cent, in the July fig­ures re­leased on Fri­day.)

We’re pleased that the pres­i­dent is now us­ing ac­cu­rate sta­tis­tics, but it’s ab­surd to sug­gest, as he did to the au­di­ence in Youngstown, that he had any­thing to do with these num­bers. There’s em­ploy­ment data for only the first six months of his pres­i­dency — and the African Amer­i­can un­em­ploy­ment rate has been on a rel­a­tively steady de­cline since it hit a peak of 16.8 per­cent in March 2010, dur­ing the Great Re­ces­sion. The rate had al­ready fallen to 7.7 per­cent when Trump took the oath of of­fice, so Trump tak­ing credit for this is like a rooster think­ing the sun came up be­cause he crowed.

A White House of­fi­cial did not ex­plain why the pres­i­dent has shifted his method­ol­ogy, ex­cept to note that his state­ment in Youngstown was ac­cu­rate. Stock mar­ket “We are in a big, fat, ugly bub­ble . . . . The only thing that looks good is the stock mar­ket. But if you raise in­ter­est rates even a lit­tle bit, that’s go­ing to come crash­ing down.”

— Can­di­date Trump, re­marks dur­ing the sec­ond pres­i­den­tial de­bate, Sept. 26, 2016

“Stock Mar­ket could hit all­time high (again) 22,000 to­day. Was 18,000 only 6 months ago on Elec­tion Day. Main­stream me­dia sel­dom men­tions!”

— Pres­i­dent Trump, in a tweet, Aug. 1, 2017

For years, Trump warned that the stock mar­ket was in a “bub­ble” and ready to crash — and then he be­came pres­i­dent.

As the pres­i­dent finds his leg­isla­tive ini­tia­tives stuck in Congress and vex­ing international prob­lems im­mune to Twit­ter diplo­macy, he has in­creas­ingly cel­e­brated the con­tin­ued rise in the stock mar­ket since he was elected.

The prob­lem is that be­fore he was elected, he warned re­peat­edly that the stock mar­ket would crash as soon as the Fed­eral Re­serve be­gan rais­ing in­ter­est rates. Af­ter the Great Re­ces­sion, the Fed dra­mat­i­cally low­ered rates to near zero — and kept them there for years. As he be­gan run­ning for pres­i­dent, Trump darkly warned that rates were be­ing kept ar­ti­fi­cially low to en­sure Demo­crat Hil­lary Clin­ton’s elec­tion and that ev­ery­thing would tum­ble once rates be­gan to creep up again.

The Fed did be­gin to raise rates: on Dec. 17, 2015; Dec. 15, 2016; March 16, 2017; and June 15, 2017. And yet the mar­ket has not plunged, as Trump pre­dicted, but has con­tin­ued to climb.

Dur­ing the re­ces­sion, the Dow Jones in­dus­trial av­er­age fell to a mar­ket low of 6,443 on March 6, 2009, early in Pres­i­dent Barack Obama’s first term. It stood at 19,827 when Trump took the oath of of­fice Jan. 20, af­ter a post­elec­tion rally that started at about 18,000. So there was al­ready a sub­stan­tial gain when Trump be­came pres­i­dent — what he used to de­ride as a bub­ble.

The pres­i­dent has never ex­plained his shift in po­si­tion on the stock mar­ket, es­pe­cially now that the Fed has raised in­ter­est rates three times since he was elected. The Pinoc­chio Test In both cases, the pres­i­dent’s po­si­tion shifted in­stantly once he be­came pres­i­dent.

The stock mar­ket rise un­der Obama was a mere bub­ble, whereas any gain un­der Trump is cause for cel­e­bra­tion.

As for African Amer­i­can em­ploy­ment, we would be more in­clined to ac­cept that Trump was just en­gag­ing in cam­paign rhetoric, if not for his cam­paign’s in­sis­tence at the time that sim­ply us­ing un­em­ploy­ment fig­ures did not tell the whole story. It’s all too con­ve­nient for Trump to em­brace ac­cu­rate sta­tis­tics when they look good for him. For such cyn­i­cal flip-flops, we wish we could award the pres­i­dent a Su­per Up­side-Down Pinoc­chio.

The Fact Checker GLENN KESSLER

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