The last point refers to the concentration of stock market wealth: Over 80 percent of its value is held by the richest 10 percent of households. But the more relevant warning in the novel coronavirus economy is the part about tying your political fortunes to the market. Fear about the impact of the virus on the profitability of publicly held companies has tanked both the Dow Jones and S&P 500 indexes to the somber tune of about a third, wiping out the gains made during Trump’s presidency. More than $8 trillion in wealth has evaporated over the past few weeks.
That’s an inconvenient truth for a president who has, according to the New York Times, tweeted 131 times about the stock market, invariably tying its upswings to his alleged greatness: “The reason that our stock market is so successful is because of me.” Or that market moves revealed the “great confidence in the moves that my Administration is making.” Trump has also consistently warned that unless voters stick with him, the market will head south: “If you want your Stocks to go down, I strongly suggest voting Democrat.”
I assure you, this is an unusual mistake for a president. I was on the economics team that used to brief President Barack Obama, and while, of course, we briefed him extensively on market moves, the idea of claiming credit when the market took off in March 2009 (the beginning of the bull market that just died) never even came up.
Of course, presidents can and do marginally affect markets, especially Trump. His trade war was a negative for the markets; his corporate tax cut was a booster, at least for a blip. His shaky, chaotic response to the coronavirus probably contributed to the ongoing, huge sell-off. None of this contradicts the foolishness of linking your performance to a metric far outside of your control.
But what’s the big deal? Does it matter to the bigger picture if Trump claims credit and gets blame for market swings?
I think it does, and that Trump’s market fetish is a microcosm of a dynamic for which we’re paying a heavy price. It’s the replacement of any shred of concern for the quality of governance with vicious, partisan 24/7 politics. Trump’s stock market focus is a symptom of the broader problem with conservatives who, since Ronald Reagan, have defined governing as tax cuts for their donor base, deregulating industry, and the use of racial divisions and other types of identity politics to split the electorate.
When governance is replaced with this sort of self-dealing, government itself becomes incapable of heeding the many warnings that pandemic preparedness was essential. Instead, Trump shut down the Obama-era office set up after the Ebola epidemic. Its mission was “to do everything possible within the vast powers and resources of the U.S. government to prepare for the next disease outbreak and prevent it from becoming an epidemic or pandemic.”
More broadly, when governance is disparaged and ignored, government is incapable of dealing with climate change, inequality, poverty or any of the challenges private markets cannot and will not take on.
How can such a strategy succeed? Surely, the minute that real governance is required, systemic inattention to it would prove to be the party’s demise. But before the coronavirus pandemic, the ineptitude of team Trump wasn’t so clearly and dramatically tested. Much like George W. Bush’s response to Hurricane Katrina exposed this same shortcoming, the impact of Trump’s anti-governance stance, especially in contrast to that of the presumptive Democratic nominee, Joe Biden (for whom I used to work), is already generating a spate of predictions about how the virus is hurting Trump’s reelection prospects.
If there’s a silver lining to the coronavirus, it is this. People — more pointedly, voters — need to understand in their guts that good governance isn’t just an essential function in a $22 trillion, globalized economy. It’s sometimes a matter of life and death.
I urge you to consider that fact every time you see a tweet about the stock market.