Some concerned he may suffer if market declines
During the first presidential debate in September 2016, then-candidate Donald Trump argued that the booming performance of the stock market under the Obama administration should not be trusted.
“Believe me: We’re in a bubble right now. And the only thing that looks good is the stock market, but if you raise interest rates even a little bit, that’s going to come crashing down,” Trump said. “We are in a big, fat, ugly bubble. And we better be awfully careful.”
More than a year later, President Trump has turned similar record stock market benchmarks into his favorite measure of his personal success in office. The Dow Jones industrial average is near the top of his personal list of accomplishments — and has been since the early days of his presidency, although the citations have become more frequent in recent months.
“DOW RISES 5000 POINTS ON THE YEAR FOR THE FIRST TIME EVER — MAKE AMERICA GREAT AGAIN!” the president tweeted at 6:04 a.m. Dec. 19, marking the 58th time he has mentioned the stock market since taking office. By comparison, he has tweeted 24 times about his proposed border wall and 20 times about standing for the national anthem.
The embrace of a single number to burnish his own credentials fits a long-held pattern for Trump, who has never shown much concern about overstating his own accomplishments. In the spring, Trump started championing the Labor Department’s jobless rate numbers, just months after he attacked them as phony under President Barack Obama during the campaign.
“They may have been phony in the past, but it’s very real now,” then-White House press secretary Sean Spicer quoted the president as saying.
In recent weeks, the president has taken full credit for market performance, even though the recent rate of increase largely matches the bull market run under Obama, which began after the market hit bottom in 2009.
White House officials and Trump allies credit the rise with Trump getting rid of some regulations on businesses, questioning trade policies, pushing for tax cuts for corporations and simply having a businessman as president.
Late last month, the president tweeted about “another great day for the Stock Market” and added: “I guess somebody likes me (my policies)!” Earlier that month, he tweeted: “Stock market hit yet another record high yesterday. There is great confidence in the moves that my Administration is making.”
But Democrats and even some Republicans see danger for Trump in his new favorite message. The rise in the market is not felt in the family budgets of many struggling voters. And if the market were to take a dip, it’s unlikely that Trump would take credit for that.
“I think it’s a pretty risky strategy,” said Republican economist Doug Holtz-Eakin, a former economist to President George W. Bush.
Some of the president’s defenders say his strategy has helped to undercut the Democratic talking point that the corporate tax cut benefits only the rich.
“It’s very important and brilliant to focus on the stock market,” said Grover Norquist, the president of Americans for Tax Reform, who helped push the Republican tax bill. “You are looking at 54 million people — this is not the 1 percent — they have been able to look at their 401(k)s grow over the last year.”
Convincing even a portion of the middle class to think like investors will, Norquist argued, ultimately increase the reach of the Republican Party over time.
“Democrats’ answer for everything is more cops, more government workers,” he said. “The Republican answer for everything is more 401(k)s.”
Presidents have traditionally avoided commenting directly on stock values. When the stock market reopened after the Sept. 11, 2001 attacks, White House staff told Bush not to make public comments, Holtz-Eakin remembers, because they did not want him to be blamed for market reactions.
Obama mostly resisted the temptation to take credit for the stock market rebound following his inauguration.
Part of the reason is that stock gains are typically not felt by many voters who remain frustrated by their economic situation. In recent years, Americans have become much more wary of the markets following two major stock market declines, and the share of American families who directly own stocks fell from 23 percent to 14 percent between 2001 and 2016, according to the Federal Reserve.
Rates of ownership were much lower among poorer Americans, standing at less than 10 percent direct ownership for the bottom half of families as measured by income.
Many more families own stocks as part of mutual funds or retirement programs, like a 401(k) or IRA. An April poll by Gallup said 54 percent of Americans said they had some form of stock investment either in their own name or jointly with a spouse.
A separate analysis of 2012 census data by the Government Accountability Office found 63 percent of private sector workers participated in a workplace retirement savings account of some sort.
Democrats see the president’s stock ticker obsession as a political opportunity to recapture some of the struggling blue-collar white voters Trump won in 2016.
“They don’t have a 401(k). They don’t have a pension,” said Rep. Cheri Bustos, D-Ill., about the struggling families in her district, which voted narrowly for Trump. “President Trump could not be more wrong on what he is saying because that does not mean anything to people who work two or three jobs just to make enough money to buy a present for their kids.”
Trump may be walking into a trap of his own making, said Joel Benenson, Obama’s top pollster.
“His overheated trumpeting of economic data is just creating a gap between him and working-class Americans,” said Benenson, working on strategy to retake Congress from Republicans in 2018. “They are creating a lot of disconnects for themselves that are going to be very easy for Democrats to exploit.”
Even Republican advisers to Trump, like Heritage Foundation economist Stephen Moore, concede that the stock market is not the most important measure of economic prosperity for most voters.
“What the Trump voters care about most is wages, there is no doubt about that,” Moore said.
But they argue that there will be a “wealth effect” with companies hiring more workers as their values rise, and wealthier people spend more money as their portfolios rise.
“A bad stock market is horrible for the middle class,” Moore said.