The day after President Donald J. Trump was elected, I, along with scores of others, hopped on a conference call with leaders of my brokerage firm to assess whither we were going in this brave new world. There were the usual attempts to reassure — the exhortations to stay the course, the discussion of the glories of diversification, the view that things might not be so bad after all. And though shocked global markets dropped, a lot, in the immediate aftermath, the worst never happened. At least, not immediately.
Indeed, the stock market went up and up and up, no doubt on the hope of deregulation and the reality of lower corporate taxes that were just passed along to people like yours truly in the blue state middle class. Nevertheless, for us investors, 2017 “was a very good year.” Sing it, Frankie.
But lurking in the back of my mind was the other “T” word and I’m not talking about trouble in River City. Rather I thought, Wait until tariffs hit. We’re going to be in deep doodoo.
And now we have Tariff Man. Straining under the weight of praise for the late President George H.W. Bush at a funeral where there was no love for himself, Trumpet had to reconnect with the base, his life’s blood, by tweeting out how strong he is on China. This caused the market, which has been bouncing around like a knuckleball, to drop 800 points — it’s down 500-plus more — and the memes to flow.
And I think it's gonna be a long long time
'Till I admit my econ is subprime
I'm not the man they claim I am at home
Oh no no no I'm a Tariff Man
Burning your 401(k) alone!
So tweeted Scott Lincicome. Sing it, Elton.
Not only does Tariff Man not understand that tariffs on Chinese imports are only going to hurt us, but he doesn’t seem to understand the relationship between the stock market and the presidency. Presidents can’t lift the market. They can only plant the seeds of a success that may be borne out by their successors. (See Bush 41 and Bill Clinton; and Barack Obama, who prevented America and the world from going over the economic edge, and Trump).
Presidents can, however, drive down the market with an injudicious remark. And Trump, who uses cruelty and fear to control others, feeding his narcissism, is the king of the injudicious remark.
In the past, Trump associated himself with the rising market. But the market is a tiger. You can’t ride a tiger. As Jay Carney, Obama’s press secretary, put it, “You claim the rise, you own the fall.” Failure, however, is always an orphan. Trump won’t be owning the fall, even though it’s now his market.
The irony is that if the market goes into a free-fall and there’s a recession, the case for impeachment will rise. Right now, we’re in the Goldilocks phase of the Mueller investigation, with Michael Flynn having sung like a canary, Paul Manafort having allegedly lied in the hope of a presidential pardon and Michael Cohen trying to play it just right down the middle.
Tariff Man better pray that Wall Street can keep him — and the rest of us — in orbit.