President Donald Trump, in his State of the Union address last week, boasted to the nation about stock market gains: “The stock market has smashed one record after another, gaining $8 trillion and more in value in just this short period of time.”
He has boasted about the booming market in tweets no fewer than 54 times since taking office. Including boasts he has made in speeches, he has celebrated stock market gains roughly 100 times. In January alone he extolled the “record stock market,” the “most explosive stock market rally,” the “incredible” gains, and more.
And how is that boast working out for him now?
The Dow Jones industrial average plunged 1,175 points Monday, its biggest one-day point drop in history, following Friday’s beastly 666-point slide. (It closed up 567 points on Tuesday). The S&P 500 has lost more than $1 trillion in market value in just three trading days, and the Dow’s 8 percent drop in six trading days wiped out the year’s gains.
Stocks rise and fall, but the recent sell-off shows the ultimate folly of the president’s fact-free existence. For a year, he took credit for stock market gains that were the continuation of a nine-year bull market (a market he had called a “bubble” before assuming the presidency). Now, the market is, arguably, beginning to react to Trump’s actual policies – a tax cut that added fuel to an already strong economy, raising fears it will overheat, causing inflation, higher interest rates and recession.
In ways large and small, reality is catching up with Trump.
In the same State of the Union address, Trump boasted that “African-American unemployment stands at the lowest rate ever recorded.” (Never mind that this continued an eight-year trend.) Barely 60 hours later, Trump’s Labor Department reported that this boast was no longer true: Black unemployment swelled to 7.7 percent in January from 6.8 percent in December.
Reality caught up with the Trump tax cut over the weekend in a most unusual way. Republicans had mocked Nancy Pelosi for saying the cut amounted to “crumbs” for ordinary workers. But on Saturday, House Speaker Paul Ryan tweeted out a message pulled from an Associated Press story: “A secretary at a public high school in Lancaster, PA, said she was pleasantly surprised her pay went up $1.50 a week . she said [that] will more than cover her Costco membership for the year.” Amid the social media ridicule that followed – Rep. Joe Kennedy noted that the wealthiest Americans get an extra $3,000 per week – Ryan took down the truth-telling tweet.
In Illinois, reality is catching up with Trump, and Republicans, in a less amusing way. Trump has given rhetorical support to white supremacists – in Charlottesville, for example, and with talk about “shithole” African countries. Such comments have won praise from the likes of Richard Spencer, David Duke and the Daily Stormer.
But look where this is Göring. The Chicago Sun-Times just reported that a white-supremacist Holocaust denier is now poised to be the Republican nominee in a Chicago-area congressional district. At the same time, a Republican state representative challenging the state’s Republican governor released a vulgar ad portraying a deep-voiced transgender person thanking the governor for the right to use a girls’ bathroom, a woman in a pink protest hat thanking him for her abortions and a black teacher thanking him for bailing out public schools.
State party officials can’t get either candidate to back off – and no wonder. The president of the United States and leader of the party has, with his actions, licensed this anything-goes environment.
But perhaps nowhere does reality threaten such a rude intrusion into Trump’s world as it does on Wall Street. Trump claimed credit for the rising stock market, even though it has been setting records for about six years. But what goes up inevitably must come down.
New York Federal Reserve Bank President William Dudley, in a prescient speech as the market surged last month, said that while he was optimistic about the near term, he was concerned that the tax cut worsened a fiscal position already “far worse” than before the last downturn and that the “extra boost” caused by the tax cuts to an already tight labor market means the Fed “may have to press harder on the brakes at some point over the next few years. If that happens, the risk of a hard landing will increase.”
Now just such a concern is riling markets. For the braggadocious Trump, it could be a particularly hard landing.
Follow Dana Milbank on Twitter @Milbank.