Trump supporters have been sending me short messages asking, “How is your 401(k) doing?”
They are making three assumptions:
1. The stocks in my retirement account are doing well.
2. I am happy about that.
3. I have President Donald Trump to thank for my good fortune.
Assumptions one and two are correct. Three is not.
The stock market and the larger economy actually did much better under Barack Obama than they have under Trump.
First off, presidents don’t have nearly as much control over the stock market as many believe.
Presidents inherit different business cycles. New technology, such as the internet, for example, influences economic developments, as do black swan events, such as the Sept. 11, 2001 terror attacks on the World Trade Center and the Pentagon.
We could add the COVID-19 pandemic to the list of surprises, though in such cases, presidents who meet the challenges can speed up a recovery. Trump has not.
But since Trump and his boosters break out the brass instruments every time stock prices make a notable advance, let us inspect claims crediting the president for these pleasant market closes.
Let’s first start with the numbers.
In the first 43 months of Donald Trump’s presidency, the S&P 500 index rose about 49% — a nice gain, for sure. But in the first 43 months of Barack Obama’s, it was up more than 70%t.
Over the course of Obama’s two terms, the S&P 500 rose 176%.
Under Bill Clinton, it absolutely soared, by 211%!
So the idea Trump is some kind of stock market miracle man is — excuse my French — BS.
Then there is the real economy, where misery continues to haunt the land.
The wealthiest 10% of Americans own 84%of the stock, which suggests there are a heck of a lot more working stiffs going broke during the coronavirus recession than stockholders riding high.
The real economy remains in tatters, largely because of Trump’s incompetence and disinterest in bringing this virus under control.
At least 22 million jobs were lost, and despite some comeback, only 42% of them have returned.
The unemployment rate remains above 10%.
On that subject, Trump produced 1.5 million “fewer” jobs in the first three (pre-COVID) years of his presidency than Obama produced in his last three years.
And as the economy boomed, Obama saw no need to push a deficit-exploding tax cut that would have favored the top incomes while producing only a temporary bump in capital investment.
It is true the stock market is not the economy, but it doesn’t follow they are unrelated.
Investors rightly are worried the weak economy will come back to bite them. They know most of the gains reflect a handful of tech stocks many Wall Street analysts warn are now grossly overpriced.
“Stressed About U.S. Stocks, Investors Are Betting Big on Europe,” reads a Bloomberg News headline.
The story cites a survey of fund managers that finds a growing preference for investing in Europe over this country.
The reason is Europe, having brought the virus largely in check, is reopening.
We remain stuck in the jaws of the pandemic.
One other consideration.
I like a healthy 401(k), but I love my country more.
The coronavirus was bound to hit here, but we did not have to suffer this level of sickness and death.
And even as stock prices have held up (so far), the economy remains dreadful for millions of shops, restaurants and other Main Street businesses not listed on any exchange.
Meanwhile, investors who still think Trump is pulling prosperity out of his magic Make America Great Again hat need reminding: They did much better under Obama — and so did everyone else.
Follow Froma Harrop on Twitter @FromaHarrop. She can be reached at firstname.lastname@example.org.