Trump Deserves Some Credit for Stock Market Gains

An emerging consensus that President Trump doesn't deserve credit for the stock market boom since his election deserves a second look.


Anthony Behar/Sipa USA/Newscom

In an era of political polarization, here's one item that's rapidly emerging as a rare bipartisan consensus: President Trump doesn't deserve credit for the stock market boom since his election.

"Can we thank Trump for the stock market boom? Short answer, no," a scholar at the center-right American Enterprise Institute, Desmond Lachman, wrote in a piece published by Newsweek.

The pollster to Hillary Clinton's presidential campaign and to President Obama, Joel Benenson, tweeted: "Truth about @realDonaldTrump's 'record' stock mkt: he inherited from @BarackObama 2nd longest bull mkt in history."

As with most items on which there is rare bipartisan consensus, however, this one deserves a skeptical look. To understand why, try imagining the opposite scenario. What if, after Trump's election, the stock market's value, as measured by indices such as the Dow Jones Industrial Average, the Standard and Poor's 500, and the Nasdaq Composite, had gone in the other direction? Imagine it had plunged 20 percent and eradicated $4 trillion or $5 trillion in value.

Does anyone really believe that the press, the think tank folks, and Democratic operatives would be running around explaining that really what happens in the stock market isn't under Trump's control, and that it's really attributable instead to the preceding administration, the Federal Reserve, or the value of the dollar? No way. Instead they'd almost certainly be blaming Trump.

While Obama's team now boasts about the stock market's performance on his watch, it was singing a different tune back in March 2009. Politico reported back then, "Obama's team has repeatedly cautioned reporters against judging him by the ups and downs – and lately downs–of the stock market, scraping 12-year lows."

The stock market, in other words, is like a lot of things: politicians want to take credit for it when news is good, but absolve themselves of responsibility when news is bad. One might hope for a more consistent perspective from journalists or from independent research organizations. Imagine, say, an election-day to election-day presidential job-performance dashboard that included data on measures such as stock market performance, the value of the dollar, job creation, unemployment, labor force participation, and real GDP growth.

It can indeed be hard to isolate a president's influence on all these things from other variables, such as, say, the composition of Congress. Should Obama or Bill Clinton get credit for the stock market booms in their terms? Or should the Republican Congresses under which they occurred? And how does one accurately account for the period post-election but pre-inauguration, when stock market gains may reflect anticipated improvements, but growth results measure existing budgets and policies?

In the cases of both the Bill Clinton and Obama stock market rallies, the prosperity wasn't sufficient, or widely enough shared, to bring about the election of a successor from the Democratic Party. That is a caution for Trump. If he wants stock market gains to translate into re-election for himself or for a chosen successor, the index performance will have to translate into feelings of economic security and opportunity for individual voters.

No politician, however determined, can entirely insulate American individuals or families from the ups and downs of the business cycle or from the challenges of a competitive market economy. It's enough, usually, if a presidential administration merely refrains from doing things that could make matters much worse. On that front, Trump has flirted with danger: protectionist tariffs, restrictions on immigration, even some trial balloons of proposed marginal tax rate increases for individuals. The stock market gains indicate that a lot of people view these as negotiating ploys, posturing, or political theater rather than as policies that will actually be enacted.

Or perhaps the view is that other steps Trump takes—reducing regulation or slowing the growth of it, reducing corporate income tax rates, allowing more energy exploration—will outweigh any negatives. In other words, there's a decent case that Trump does deserve at least some credit for the stock market gains.

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    1. then they came for the gay nazis, and I did not speak out…

    2. Lol. Why?

    3. Good stuff.

  1. I suppose you can give him credit for being not Obama but that’s about it.

    1. That’s not nothing.

    1. Hell they were also predicting hell

  2. When the economy sucks, its usually because of the government. When the economy is good, it’s usually despite the government.

  3. “Trump deserves credit for something” Reason staff

    Teardrops land on the laptop keyboard.

  4. RE: Trump Deserves Some Credit for Stock Market Gains: New at Reason

    No, he doesn’t.

    1. The stock market is clearly a speculative enterprise. I think the headline should be something more like:

      “The Prospect of a Trump Presidency Deserves Some Credit…”

      The proof will be in the pudding, as they say. It’s reasonable to see the stock market results since the election as at least partially due to the promises of candidate Trump. Cutting corporate taxes, regulation, etc are all things that should help the economy, and certainly Wall St has always responded favorably to these things. However, if healthcare is any metric on how effective President Trump will be at delivering promises made by candidate Trump, we might be at the peak of the Trump bubble.

      The Republicans never seem to fail to screw up in their supposed quest to reduce the size and scope of government.

      1. We could be at Peak Trump?

        That Gawd.

          1. Not peak Twittering I’m afraid…

      2. The Republicans never seem to fail to screw up in their supposed quest to reduce the size and scope of government

        Because there might be only 3-4 Republicans who actually believe in that quest.

      3. The Prospect of a Trump Presidency Deserves Some Credit…

        I think this is closer to the truth. What has Trump actually *done* to justify this response?

        1. I will give credit to some of his thing he has done bar none.

        2. His executive order on 2 to 1 regulations. My company is pretty stoked that we won’t be getting regulated to death anymore.



  6. Corporate earnings have been good and the companies have used the profits to buy their stock back. The Fed’s QE policy is involved. There’s a shitload of money out there because of low interest rates and the money has been going into stocks for awhile. The Trump trade is real though. There’s an expectation that companies will see greater profit from reduced taxation and regulation. If that expectation isn’t realized or should they cut back on monetary easing or should a war break out things could get ugly fast. The beauty of it so far is that despite the record printing of money inflation has been kept in check and in my half assed opinion I think that has a lot to do with low oil prices.

    1. There’s an expectation that companies will see greater profit from reduced taxation and regulation.

      Correction: There WAS an expectation that companies will see greater profit from reduced taxation and regulation.

      Labor Day will pass by with no significant legislation.

      1. Palin’s Buttplug|8.7.17 @ 5:38PM|#
        “Correction: There WAS an expectation that companies will see greater profit from reduced taxation and regulation.
        Labor Day will pass by with no significant legislation.”

        Like YOU should be a source for any predictions.
        Pay your bet yet, turd?

        1. Gotta have a job to make payments.

    2. Didn’t QE end around 2015-2016?

      1. Oct of 2014.

        The Fed bought a shit-ton of Treasuries. So What?

        Inflation was supposed to take off into the stratosphere. All the wingnuts were yelling HAPER-INFLATION!

        Never happened.

        1. Because the huge oceans of money that were created are all dammed up by Fed policy.

        2. There are like only 3 M in my bag of candy. $5.00 for a 3/4 empty box of cereal that is mostly just subsidized high fruitcose corn syrup. Whatever you weasel gay fuck

          That you aren’t beat into a coma with a claw hammer is only because it is illegal.

          1. If I ever bump into Weigel out in public somewhere, I just might do everyone a huge favor and put him out of his misery.

    3. No, it’s because the Fed is paying banks to not lend out all the cash they got during the crisis. If that cash started making its way into the economy, you’d see much more price inflation.

      1. IOR is puny. What is it? .25%?

        1. Such frustration as you see the regulatory state being dismantled. Don’t worry, your TANF checks will keep coming. Unfortunately.

        2. Palin’s Buttplug|8.7.17 @ 6:15PM|#
          “IOR is puny. What is it? .25%?”

          what, turd?

  7. Note to President Trump: The stock market has hit an all-time high in 30 of the last 54 months…..index.html

  8. The Con Man said the Dow was in a “bubble” at 18,000 a year ago.

    Now they are not.

  9. I like how Lil’ Kim-Trump in North Korea is talking trash to the Con Man – vowing “revenge” on the USA.

    Good times!

    1. How much do you get paid for your disinformation?

      P.s. your girl swallows for me.

      1. you swallow for your gjrl.

  10. I guess everyone is off work now.

    1. That, or the sudden stench.

  11. Stock markets are sensitive harbingers impending liquidity crunches. The Dems promised in their platform to do their utmost to make electricity a Schedule 1 controlled substance based on pure superstition and data fraud. The S fell with the Paris Agreement, but took off when the GOP won. The only real difference in platforms was that the GOP platform rejected carbon taxes, spat on ecological national socialist subsidies of fake energy and promised to improve and simplify the electrical grid. God’s Own Prohibitionists within their ranks are seeing that Beauregard Sessions was the first Senator to speak up for The Don and got a post out of the deal. He is evidently not going to be another Harry Anslinger or even a Mabel Willebrandt. The energy plank probably improved the market, and it sure as hell defeated the Dems.

  12. If Drumpf deserves a little, Obama deserves a lot.

    But Republicans posing to be libertarians would then move to crediting the corporations for their profits

    funny how “you didn’t build that” applies only to the black guy

    1. Both inherited recovering economies. Like oil prices, the stock market has almost nothing to do with the president and Congress. Politicians taking credit or getting blame for either is usually bullshit.

      1. … Obama inherited a “recovering economy”?

    2. Red Twilight|8.8.17 @ 1:20AM|#

      Oh, oh look!
      Lefty imbecile made a funny!
      Fuck off.


    “Since 1945, the average annual gain under a Democratic president is 9.7%. Under a Republican president, it’s only been 6.7%, according to Sam Stovall, chief equity strategist at S&P Capital IQ.

    Before Democrats take a victory lap, consider that the best stock market performance of all came under Republican President Gerald Ford, who was in office form August 1974 to January 1977. Under Ford, the S&P 500 surged 18.6% a year, on average.”

    1. There are a couple of problems here…

      As the Reason article points out, inasmuch as the President has anything to do with the stock market, so too does Congress.

      In reality neither has any direct impact on the stock market, and any impacts they have pale in comparison to market forces. The internet has done more to boost the stock market than probably all Presidents combined.

      The Reason article cleverly apportions a little bit of credit to Trump. In reality there is probably always a little bit of credit due to the President. But as you start diluting the average annual gain values from Stovall’s analysis by whatever percentage of credit is due the government then the numbers really start to approach each other.

      In other words, Stovall’s analysis seems to further point out that team red and team blue really aren’t that much different. The real question would be what would happen to the stock market if the government got out of the business of picking winners and losers?

      1. Republicans controlled Congress for 6 of Clinton’s 8 years. They are the ones who wrote all the bills and all the laws.

  14. The real truth: TARP and trillions of dollars of free money conjured out of thin air reinflated the asset valuation bubble.

    And when it pops again (and of course at some point it will), next time they’re not going to have zero percent interest rates to go to in their magic bag of tricks, because we’re basically still there now after nine years.

  15. I think employees who are not upper management will have to learn how to gain some leverage in negotiating salaries with companies. Just subtle slowdowns. It’s ridiculous how exec salaries have outpaced not just lower level employees but even midlevel employees by such a high margin in recent decades regardless of which party is in power. That’s because of lack of enough transparency in real compensation for people. When I mean transparency, I don’t mean some disclosure with a lot of footnotes where it is tough for a layperson to understand what the hell is the real compensation. Also, employees should not be afraid to figure out your colleagues salary. Less secure employees may not like it . But if you are good and you are secure about your peers making what they deserve, it can really inform you on how to negotiate the highest possible salary without having management laugh at you. Don’t be afraid to move to different companies too. Otherwise, you will be left behind in the salary race.

    1. Sure, full transparency would probably clear things up.

      But we don’t have a culture of transparency, which means it would have be regulated and required.

    2. “It’s ridiculous how exec salaries have outpaced not just lower level employees but even midlevel employees by such a high margin in recent decades regardless of which party is in power.”

      That’s a ridiculous statement. How do YOU know who should be paid what?

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