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