THE STOCK MARKET IS NOT THE U.S. ECONOMY!!  Hyping a hot stock market as proof that the tax cuts are working is a false premise.

​

Markets are not an accurate reflection of the overall economy, and they are most certainly not a reflection of what is happening in the homes of most Americans. That whole Wall Street vs. Main Street proverb is way overused, but the truth is that Wall Street and Main Street operate in two completely separate, terribly unequal universes.

​

In any event, the stock market didn’t do better after the tax cuts anyway. Stock market returns during the first Trump administration rank 8th when compared to other presidents. But let’s dig a little deeper. 

 

Fortune magazine reports that “on October 31st of Obama’s third year in office, the S&P 500 (the 500 largest public companies on either the New York Stock Exchange or Nasdaq exchange, measured by market capitalization) hit 156 percent of the value it had on President Obama’s first day in office, which means the index increased by 56 percent.” In that same timeframe, “under Donald Trump the increase was 34 percent, or 22 percentage points lower than the gain under Obama.”

​

Ouch. Well, okay, let’s check the other exchanges. Using the same timeframe, on the Dow – which is 30 large, capitalized companies chosen specifically by Dow Jones & Company to represent the broader economy – “the percentage change under Obama was roughly 150 percent, meaning a 50 percent increase over the initial value. Under Donald Trump, the 136 percent change, or 36 percent gain in value, was 14 percentage points less.”  Hmmm…

 

Well, surely the Nasdaq went better for the super-duper stock market wrangler Donald Trump. Nope. During the first Trump administration, “the Nasdaq saw a 149 percent change for an increase of 49 percent.  At the same point under Obama, it was a change of 186 percent – an increase of 86 percent, or 37 percentage points more than for Donald Trump.” Double ouch.