Since taking office, President Trump has enjoyed some very good numbers on the economy. Unemployment has been low. GDP growth has been strong. And up until just recently, the stock market had been on fire. The president hasn’t missed many opportunities to tout these successes, and who can blame him?
While some would argue that the policies of the previous administration should receive at least some of the credit, it’s hard to deny that Trump and the Republicans in Congress have been good for the economy. The lifting of regulations and the tax-reform bill from last year have removed constraints on businesses, and many Americans (not just corporate CEOs) have enjoyed the benefits. Millions of workers are receiving larger paychecks, and the number of companies that have announced bonuses to their employees (as a result of the tax-reform bill) just surpassed 500.
Not exactly the economic “Armageddon” Nancy Pelosi had promised.
But one can’t ignore the recent volatility of the U.S. stock market. While 2017 gave us the calmest year for markets in over 50 years, 2018 has been a different story.
Just over three months into the new year, we’ve seen the S&P 500 change by 2% a half-dozen times. 400-plus market swings have suddenly become the new normal, and it’s not due to really anything that’s going on in the private sector, or even as a result of passed DC legislation.
It’s happening in direct response to President Trump’s ego.
Contrary to the suggestions of some in the mainstream media that the GOP’s tax bill is to blame, the market is reacting to Trump’s ill-advised tariffs on foreign imports and his public tirades against American companies — most notably Amazon.
Last year, I attended an event in Colorado Springs, CO at which syndicated columnist Charles Krauthammer offered his political insights to an audience of questioners. When asked whether he thought that President Trump had any guiding ideological principles in regard to U.S. policy (that weren’t purely rhetorical or subject to whims), Krauthammer at first answered no. He then took a moment and added that Trump might actually believe that there was an inherent unfairness in U.S. trade deficits with other countries (something the president had talked about many times as a candidate) that required rectification.
It looks like Krauthammer was right.
While the president has waffled on a number of stances since taking office (and even before), he’s been remarkably consistent when it comes to his thesis that trade-deficits are bad for the United States, and a substantive threat to our national security.
Facts and history don’t support that narrative, but that doesn’t mean much in the mind of our president, whose pride-invested dedication to this perceived injustice has compelled him to impose ill-advised trade tariffs (indiscriminately at first, but later scaled back under pressure from foreign allies) on other countries.
Trump has been nearly alone on this, even within his own party. The president’s top economic advisor, Gary Cohn, quit over the reckless venture, and very few Republicans in the U.S. Congress have voiced support. In fact, many have voiced strong opposition, and for very good reason. Driving up the cost of imported goods is foolish. It’s bad for U.S. consumers, because they’re ultimately the ones who have to pay the difference. Not to mention that other countries are then inclined to place their own tariffs on goods exported from the United States. We’re currently seeing this with China.
This is more commonly known as a “trade war,” and despite President Trump’s painfully naive insistence last month that “trade wars are good, and easy to win,” they’re not. They’re not good for anyone — especially not consumers. And the only reason we’re engaged in this self-defeating exercise (which keeps sending the stock market into a tizzy) is because of Trump’s pride.
We’ve been seeing a similar situation with the president’s numerous threats to penalize Amazon.com Inc. (and its CEO Jeff Bezos) for… Well, seemingly just for being super successful.
Taking a page out of President Obama’s “economic justice” playbook, Trump has decided that the largest Internet retailer in the world is unfairly getting away with something by legally negotiating deals with other companies (like the U.S. Post Office) to save money and provide cheaper goods to consumers. And thus, in his view, “something” must be done to “even the playing field.”
There’s no question that Amazon’s successful practices have put a lot of other companies out of business — especially brick and mortar retailers (which include many small businesses) that could no longer compete with Amazon’s prices and efficiencies.
But this is capitalism — an economic system by which Donald Trump himself flourished under to achieve billionaire status. Why should a President of the United States (especially a Republican one) concern himself with a privately-run company (which employs over a half-million people) that is achieving enormous success?
The correct answer is that he shouldn’t. But again, this is about ego.
As the Wall Street Journal recently reported, White House officials recognized early into the president’s term that he was fixated on the false notion that Amazon was dodging taxes and taking advantage of the U.S. Postal Service. It got to the point where Gary Cohn even put together PowerPoint presentations for the president, to debunk the phony accusations and educate the president so that he could understand what he was talking about, when commenting on the company.
It didn’t work. Trump has remained on the attack, and continues to repeat the same false statements while asserting that the company must somehow be penalized. And Amazon’s stock value has been all over the place as a result.
Why is Trump doing this? According to a source close to the White House (as referenced in the WSJ piece), it’s because Amazon CEO Jeff Bezos also owns the Washington Post, a publication that Trump believes has covered his presidency unfairly. It also probably doesn’t help that Bezos is a far more successful (and wealthy) businessman than Trump has ever been.
While those who contend that Trump won’t (or won’t be able to) subject Amazon to government retribution may well be right, the act of a president waging a personal vendetta against an American retailer (the largest in the world), whose success comes from offering affordable prices to consumers, should not be shrugged off.
We on the Right certainly had a problem with this kind of thing when the Democrats would vilify Walmart. We shouldn’t tolerate it from Trump either. We should want a consumer-friendly presidency, and right now, that’s not what we’re getting.
While many Americans have benefited from the economic policies of Trump and the Republicans in Washington, those gains can quickly disappear if the country’s consumers are needlessly subjected to having to pay more for what they purchase.
I don’t know about you, but I just don’t think the pacification of a president’s ego is worth my hard-earned money.