The Stock Market closed down today by more than 1,100 points. That would make it almost 2,000 points lower in the last three days. This is the worst decline in over two years. And it totally belongs to Donald Trump.
For the past year Trump has been bragging about the performance of the stock market and taking credit for its rise. That was a pretty stupid thing to do given the vast array of influences on the market and its volatility. Particularly when we have been stretching out the second longest bull market in history.
Three weeks ago, while stocks were still rising, I wrote an article warning that Trump’s bragging would come back to “Bite Him in His Sh*thole Country.” The article said in part that…
“It’s always dangerous to rely on stock market performance to validate the economy. There are too many factors that can shift investor sentiment. It is a fluid indicator that could reverse course tomorrow. Indeed, many stock analysts regard the market’s current position as overvalued. These analysts are predicting a ‘correction’ that could send the markets down significantly.”
But Trump continued to boast about numbers that he obviously knows nothing about. And now the market is trending lower as if to mock the President’s arrogance. But it needs to be noted that there are tangible reasons why Trump is to blame for this sell off. Many economists are citing something that Trump regards as one of his greatest (only?) accomplishments. And even Trump himself raised it during his speech in Ohio today. When he wasn’t accusing Democrats of “treason” for not applauding him at the State of the Union address, he said this:
Thanks to the historic TAX CUTS that I signed into law, your paychecks are going way UP, your taxes are going way DOWN, and America is once again OPEN FOR BUSINESS! pic.twitter.com/GISFbDDGXX
— Donald J. Trump (@realDonaldTrump) February 5, 2018
The tax cuts that Trump was obsessed with were never a good idea. Their benefits were heavily slanted toward corporations and the wealthy. But they were also an unnecessary stimulus to an economy that was already overheated. That was all that Wall Street needed to justify dumping stocks whose valuations were out of sync with reality. His tax bill also produced new debt in excess of $1.5 trillion. That makes investors nervous about rising inflation and interest rates.
Finally, when an economic stimulus is used at a time when it isn’t needed, that means that it won’t be available in the future when it might actually be useful. So investors are looking forward to a future market correction, or even a bear market, and the government will have no tools to respond or mitigate the damage. Therefore, many are getting out now and moving their assets into safer investments or cash. And none of this would be happening were it not for the greed and ignorance of Donald Trump and his allies in Congress.
Trump’s relentless bragging about the market when it was up presents an interesting problem for him. Who will he blame for the decline? He got exactly what he wanted with the tax bill, which received no Democratic votes. There is no one other than himself to which this can be attributed. Of course, that won’t stop him from inventing some culprit to point his bony fingers at. His narcissism is all-consuming and his GOP supporters still seem unwilling to put their country above their noxious party. So be prepared for more scapegoating as Trump continues to panic and his fear drives him further into desperation.
This is a Creative Commons article. The original version of this article appeared here.