Trump has always been a president untroubled by his contradictions. When the stock market is up, he takes his bow center stage. When it’s down, he blames Jerome Powell, his appointment as Chair of the Federal Reserve Board. Conventional wisdom discounts either position. “…Presidents get too much credit and blame for the ups and downs of stock indexes.” (“The Trump Slump” by Peter Coy, Bloomberg Businessweek, January 7, 2019, pg. 11)
Nonetheless, Trump’s recent tax cuts did benefit the indexes. They boosted companies’ after tax profits, explains writer, Peter Coy. Add Trump’s decision to deregulate industries and one shouldn’t be surprised by the euphoria that followed. Among the happiest were small business owners who experienced a significant boost. (Ibid pg. 11.)
Unfortunately, Trump was quick to step on his accomplishments. His trade war with China rattled investors, plunging them from their sugar high into a near comma on a single day, dropping it 1000 points. Since then, the chart has been choppy. In the meantime, those with an eye to the economy note Trump’s tax cuts have increased our national deficit, up 17% in 2018. The trend bodes ill for the country.
Some imagine taxing the rich will solve our difficulties. No doubt a tax is in the future, but the rate won’t approach 70%, as some have proposed. The reasons are many. A Republican Senate majority is one. Nor is it likely new taxes will pay for many new programs. Existing ones, like Medicare, are ballooning.
If we want to lift all boats, the problem to address is income inequality. Tax cuts haven’t encouraged big industries and corporations to raise salaries. Instead, they’ve used the surplus to buy back stock or acquire other companies. Little has trickled down to the paycheck.
Unions once gave the worker a voice in our economy, but no more. How to revive these institutions, or create some other equalizer, is the question. If Trump wants to take credit for growing the nation’s wealth, he should take this bull by the horns.