Contrary to predictions of doom by well-known economists like Paul Krugman, the Trump era has not been a doom for the markets. On the contrary, the markets only went north. Record highs were made by Nasdaq Composite Index, Dow Jones Industrial Average, and Standard & Poor 500 stock index. President Trump, as is his wont, took all the credit. He said that the stock markets are thriving only due to him. He claimed that his administration’s economic policies created jobs.
At first glance through the statistics of the last few months, it seemed that Trump could be correct. The pace of upswing in the three stock market indexes only went up after Trump became the President. The “Trump” component clearly pushed the markets higher, as evidenced the days of and after his victory. This Trump-bump, as the economists term it, was caused by his dismantling of Obama-era regulations. He has also worked with the Congressional Republicans to pass an important tax bill which led to a major reduction in the rate of corporate tax. Many factors have improved under Trump. Unemployment data for December 2017 is 4.1 percent. This is the lowest since August 2000. Growth is predicted to be a handsome four percent for the fourth quarter. The Consumer Sentiment Index compiled by University of Michigan in October 2017 reached its highest since January 2004. The November score was a little lower. It is clear that Trump, similar to most presidents, has claimed all credit for the good economic conditions he has practically inherited from the Obama regime.
Critics say Trump is wrong. According to Krugman, stocks are all over the world and is not particular to Trump’s USA. Many believe that the upswing happened despite Trump, a legacy of the former Obama presidency. For anti-Trump economists, turmoils in the White House and a warlike environment with North Korea, all have generated the kind of political and economic uncertainty hated by Wall Street.
There is a good irony in all these. Although Trump has claimed all credit for a healthy economy, the American public has not given him any credit. The President’s approval rating has markedly dropped from the time he became the holder of this peak elected post. The opposition Democrats have gained in congressional ballot share. These are dangerous trends both for the President and fellow GOP members while they hurtle towards the 2018 campaign.
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