During all the fiascos that have been happening one after the other during the Donald Trump presidency, there was one thing that he could boast about and that was the stock market. During his first year of office, it rose by a whopping 25%, greatly pleasing the wealthy class that are the ones who have most of their assets in the stock market. Ordinary people with retirement plans also have a stake in the stock market because those funds are invested in it but I suspect that most are like me and have little idea of what is happening because we do not actively buy and sell stocks ourselves.
So purely on the basis of the market rise Trump could claim that the economy was booming and that people were better off even if wages were largely stagnant. The massive tax cut for the wealthy that he and the Republican party engineered that siphoned even more wealth to the oligarchy sustained for him the illusion that things were going swimmingly, since he and his friends were doing well.
But now even that is coming crashing down. I do not understand the stock market and what makes it go up and down but for whatever reason, the last three months have been terrible for it, with prices tumbling around 20%, the steepest losses occurring in the last month. The market figures now are not much higher than when Trump took office. As a result, Trump is lashing out trying to avoid blame for the situation, seeking scapegoats to blame the losses and he seems to have decided that the villain is the Federal Reserve and its chair Jerome Powell because they have raised interest rates. He says that he has a much better understanding of how the economy works than Powell and reportedly has sought to fire him. The possibility of that move, coupled with the government shutdown and the trade wars and general instability, are being blamed for the recent losses.
Oddly enough, the treasury secretary Steve Mnuchin, in an apparent attempt to calm the markets before they opened this morning, may have scored an own goal, by tweeting reassurances that the liquidity situation of the banks was strong, which was not one of the things that people had been worried about. As Jared Bernstein, who was economic adviser to former US Vice-President Joe Biden, said, “It’s like sending out a message saying our space shields can intercept incoming asteroids. Uh, I didn’t know there were any coming our way.” Other economists like Paul Krugman have blasted the sheer ineptness of Mnuchin’s actions, even calling him an ‘idiot’ and that “We should take seriously the possibility that we’re looking at an economic team as clueless as their boss.” Despite Mnuchin’s attempt at reassuring the markets, it dropped sharply today, even during a shortened session.
Trump had reportedly been planning to spend 16 days over the Christmas and New Year period at his resort in Florida, but even he, insensitive and oblivious as he is of others, must have realized that pictures of him golfing while the government is shut down would look bad. So he has decided to stay in Washington. But that has not prevented him from self-pitying whining about it, tweeting ” I am all alone (poor me) in the White House.” You can expect a steady stream of tweets from him over the next week, during the commercial breaks in the TV shows he seems to watch obsessively when he is not playing golf.