Donald Trump's depiction of the state of the American economy has consistently been as bleak as it is subjective. The unemployment numbers are fictional, he's claimed, with the real number perhaps as high as 42 percent! (It isn't anywhere close.) President Obama's never achieved 3 percent growth in a year, a first for a modern president! (True when you look at calendar years and presidents after Herbert Hoover.)
But Americans don't often take the big picture view on the economy, either. How the country is faring economically is as subjective for us as it seems to be for Trump. Setting up a long-term question: When Trump's depiction of the Trump economy turns suddenly sunny, will America agree?
That process began Monday evening, with another tweet from the president-elect.
The world was gloomy before I won - there was no hope. Now the market is up nearly 10% and Christmas spending is over a trillion dollars!
— Donald J. Trump (@realDonaldTrump) December 26, 2016
There are three economic indicators in that tweet, by our estimation: economic confidence (the measure of hope, if you will), the Dow Jones industrial average and holiday spending. (Why “holiday” vs. “Christmas”? We'll get to that, but it's not because we've declared war on the Christian holiday.) Here's how those numbers look.
Economic confidence spiked after the election of Trump, according to data from Gallup. The effect is pretty remarkable, in fact.
What's going on here? Last month, Gallup explained the switch in one simple word: partisanship.
“Republicans and Republican-leaning independents now have a much more optimistic view of the U.S. economy's outlook than they did before the election,” Gallup's Justin McCarthy and Jeffrey M. Jones wrote. “Just 16% of Republicans said the economy was getting better in the week before the election, while 81% said it was getting worse. Since the election, 49% say it is getting better and 44% worse.”
Put another way: More than 8 in 10 Republicans were pessimistic about the economy before the election — but immediately after, more were optimistic than pessimistic.
Update: On Tuesday evening, Trump referred specifically to the consumer confidence index in a tweet and claimed credit for it: "Thanks Donald!"
The hope, in other words, had a partisan tinge, just like everything else.
The Dow Jones industrial average reflects confidence, too. Trump's right that the index is up nearly 10 percent since Election Day. We looked at this surge earlier this month, putting it into historical context. It matches the post-election surges enjoyed by Calvin Coolidge and Herbert Hoover (the president whose tenure overlapped with the Great Depression, meaning he, too, failed to hit Trump's arbitrary 3-percent-growth metric).
The Dow has been flirting with the symbolic 20,000-point mark for some time; if it's surpassed, expect another Trump tweet.
How much credit is due to Trump for the increase isn't entirely clear. The Dow is up 16 percent since the beginning of the year. At the end of March, relative to a month-and-a-half prior, the index was up 12.9 percent. Since Obama was elected in 2008, the Dow is up 107 percent — more than double — but he isn't usually described as the cause of that growth. What's more, Trump is setting up a risky connection: If the Dow does well thanks to him, what happens if and when it tanks?
Last week, CNN Money reported that Trump probably deserves some credit for the improved Dow in the sense that a quarter of the spike is a function of Goldman Sachs's improvement. Goldman's up nearly a third since Election Day, an improvement that overlaps with Trump tapping its president and several alumni for posts in his administration.
The credit Trump claims for holiday spending, though, is far less due. The number he cites — a trillion dollars — appears to come from a Deloitte survey that projected holiday sales from November through January and reached that trillion-dollar number.
Mind you, that survey was released in October, meaning that the projections had nothing to do with a Trump electoral win. Deloitte instead credited better household finances and the steadily improving economy for the figure. In fact, Deloitte's numbers specifically indicate that three-quarters of Americans didn't expect the presidential election to affect their spending at all.
That tweet, though, offers another taste of what we can expect from President Trump, once he's inaugurated. Just as he railed against government figures during the campaign, we can expect him to isolate and exaggerate good economic news once he's in office. (Or, apparently, even before.) This isn't unique to Trump, of course; politicians, including Obama, aren't shy about highlighting the positives and downplaying the negatives. What makes Trump different is scale: His willingness to take credit or assign blame tends toward the extremes.
In an article at Politico, AEI's James Pethokoukis neatly summarizes what President Trump's economic pronouncements might be like. “The president-elect judges his own personal wealth based on his own feelings,” he said, referring to a comment Trump once made in a deposition. “So on any given day, he could just decide based on his feelings that America is great.”
The catch? If voters aren't convinced by November 2020 — if their subjective analysis of the economy doesn't match Trump's rhetoric — he's in for an awfully tough reelection.