Today, we are being exposed to just one more example of how the pro-Trumpsters are making every effort to give Agent Orange (my favorite euphemism for Donald Trump) credit before it is earned.  In this case, they are hailing Trump for the stock market bump since election day.  Conservative economists who have always warned against making long-term predictions on short-term market activity are shedding their own advice.

Consider the following example.  Steve Nicklas, a certified financial adviser who writes a weekly column for our local newspaper, included the following in today’s edition.

Despite a politically divided country, the U.S. stock market continues to reach new highs.  The markets obviously like the new administration’s prescription of lower taxes, less regulation and a stronger economy.  Even though outside businessman Donald Trump is far from your polished politician.

He references the $2.7 trillion in wealth created in the U.S. stock market since the November election.

Which brings me to the reason why I called this post, “WHITE Friday.”  Because Mr. Nicklas and other conservatives are giving the WHITE guy credit after 30 days with little acknowledgement the current bull market might just be a continuation of the momentum created by the BLACK guy’s policies and stewardship of the national economy.

To make my point, let’s look at what would have been Mr. Nicklas’ prediction if he had used similar methodology after the first 30 days of President Obama’s tenure in office.  On November 4, 2008, the day Obama was elected president, the Dow Jones industrial average (DJIA) closed at 9,625.28.  On February 30, 2009, 30 days after the inauguration, the benchmark index stood at 7,365.76.  According to Mr. Nicklas’ logic, the markets were responding negatively to the Obama program.

There are just two problems with that analysis.  One, the DJIA on February 20 was a snapshot in time of a trend which had begun on September 3, 2008 when the DJIA closed at a high of 11,532.88.  If I remember correctly, George W. Bush occupied the White House when the trend began.  Second, and equally important, the stimulus package designed to kickstart a tanking economy had not yet been implemented. So anyone making a prediction about the stock market based on the same time frame Mr. Niklas is using today would NEVER have imagined the DIJA would close at 19,804.72 on January 19, 2017, Obama’s last full day in office.

So, to be fair, let’s wait and see where the market stands on Donald Trump’s last full day in office regardless of whether we are talking about eight years, four years or something even less.  He has proposed another round of supply-side economics which has historically proven to yield long-term negative returns at both the national and state levels.  Like Bush 43 who turned low employment and a budget surplus into the worst recession since the Great Depression, Trump has the same opportunity to undermine a 4.7 percent unemployment rate and 75 consecutive months of job growth.  Need we remind Mr. Niklas lower taxes and deregulation were exactly what precipitated the great recession?

So let’s hold the praise until (1) Trump actually does something and (2) we see what impact it actually has.

For what it’s worth.
Dr. ESP