Bloomberg Biz: Trump Took Credit for Stock Market Records. Does He Deserve Blame for the Plunge?

Featured in Bloomberg Businessweek, Jan. 7, 2019. Subscribe now.
PHOTO ILLUSTRATION: JUSTIN METZ FOR BLOOMBERG BUSINESSWEEK; STEFAN ROUSSEAU/WPA POOL/GETTY IMAGES

Can you claim victory and not own up to failure? With this president, not likely.

One question to ask at this point in the turmoil is how much Trump has affected the stock market—for better during the bump and for worse during the slump. The opposite question is how much the worst year for stocks since 2008 has affected Trump. Will the market rout chasten him, cause him to retreat from some of the policies and language that have sent markets into a tizzy? Or will it drive him to attack the status quo even more ferociously to prove himself right and recapture some of that bull-market magic?

The conventional wisdom among economists is that presidents get too much credit and blame for the ups and downs of stock indexes. They are, it is said, like a mahout astride an elephant that goes wherever it wants to. This makes some sense. The fact that stocks have done better on average under Democratic presidents than Republican ones (back to Herbert Hoover) isn’t proof Democrats have a special touch for equities.

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