Pensacola, Florida
Friday October 19th 2018

Archives

Outtakes—The Numbers Rollercoaster

By Rick Outzen

One axiom in politics is beware of statistics. As soon as a politician brags and takes credit for an improvement in a statistic, it will most assuredly go in the opposite direction.

During his State of the Union address, President Donald Trump said, “The stock market has smashed one record after another, gaining $8 trillion dollars and more in value in just this short period of time.”

Taking credit for the stock market has been common for our president. When he announced the tariffs on imported solar products and washing machines two weeks ago, President Trump added, “You’re seeing what’s happening with the stock market. People are appreciating what we’re doing.”

In a tweet on Jan. 20, he wrote, “Unprecedented success for our country, in so many ways, since the Election. Record Stock Market, Strong on Military, Crime, Borders, and ISIS, Judicial Strength and Numbers, Lowest Unemployment for Women and ALL, Massive Tax Cuts, end of Individual Mandate—and so much more. Big 2018!”

His cabinet fell into the same trap. Two days after the State of the Union, Treasury Secretary Steven Mnuchin echoed the president’s taking credit for the stock market rally. He said on CNBC, “You can see the stock market’s up, you can see the dollar’s up. There’s a lot of confidence in the Trump administration.”

The next day, Friday, Feb. 2, S&P Dow Jones Indices plummeted wiping out nearly $1 trillion in value. The fall continued on Monday, Feb. 5. The Dow Jones Industrial Average plunged approximately 1,600 points at one point in afternoon trading. The Dow eventually ended down 1,175 points at 24,346—the largest ever single-day point drop for the Dow. The stock market’s January gains were utterly wiped out.

The White House responded to ease fears and avoid a further run on the market. White House Press Secretary Sarah Huckabee Sanders issued a statement in hopes of changing the narrative.

“The President’s focus is on our long-term economic fundamentals, which remain exceptionally strong, with strengthening U.S. economic growth, historically low unemployment, and increasing wages for American workers,” said Sanders. “The President’s tax cuts and regulatory reforms will further enhance the U.S. economy and continue to increase prosperity for the American people.”

As I’m writing this column, the market has remained volatile, swinging in both directions. The stock market is no longer being mentioned on the president’s Twitter account.

Moral: Be careful what you take credit for, or it just might come back to bite you in the butt.