When Donald Trump was a baby, he pooped and cried and magical things happened. He was fed and cared for, and suddenly he was the center of the universe again.
This happens to most of us, but at some point we get over the idea that we’re magical creatures whose tantrums and gross, cornucopian Huggies make the world a better place.
He’s done nothing significant legislatively or otherwise that could have boosted jobs or the economy, but he’s done a lot of whining and me-makey-boom-boom on Twitter and elsewhere, and so he thinks great things are happening because of him.
For instance, Trump and his apologists like to claim that the economy has created oodles of jobs since he was elected — which is technically true, but it leaves out the fact that Trump inherited a thriving economy from his predecessor and has actually created fewer jobs per month than Obama did in the last seven years of his presidency.
But while Trump likes to dishonestly cite job creation as a big accomplishment, his go-to metric is stock market returns under his presidency.
Granted, stock market performance under Trump has been robust, but simply glancing at the S&P 500 or Dow on a given day misses a whole heap of context.
You’ve probably heard this story before. Trump has essentially nothing to do with the surging stock market. In fact, if you look at domestic markets against the backdrop of the global economy, our America First president is getting his guts stomped out on the world stage.
This is pretty easy to see, actually.
Here’s a chart of the S&P 500’s performance over the past five years (from CNN Money). Year-to-date, the S&P 500, a familiar index of U.S. stocks, has increased roughly 16 percent:
You can also see that the index has increased pretty steadily for the past five years, bringing big returns to investors under Obama and Trump alike.
And here’s a chart of the MSCI EAFE Index, which tracks international equities, and excludes stocks from the U.S. and Canada:
The MSCI EAFE has increased nearly 22 percent year-to-date. But, significantly, it’s been a relative laggard for the past several years, having actually gone down in value (and having stayed in a trough) from early 2014 to late 2016.
So does that mean Trump’s poopy prestidigitation has resurrected world markets?
In fact, renewed strength in the global economy is what has driven optimism in the markets, both here and abroad.
In an October 13 column, CNBC economics reporter John W. Schoen noted that rosy economic news from around the world is now bolstering equities markets:
Now, as the global economy appears to be picking up momentum, it may continue to push stocks higher.
The latest sign of improvement in the global outlook came this week from the International Monetary Fund, which said Tuesday that the upswing in the world's economy will likely be sustained this year and next, with solid gains in most of the world offsetting slower growth in the United States and Britain.
The IMF upgraded its global economic growth forecast for this year by a tenth of a percentage point to a 3.6 percent annual growth rate, compared with its last report in July. For next year, the IMF expects the world economy to grow at a 3.7 percent annual growth rate. The improved outlook was driven by stronger numbers on global trade, investment and consumer confidence.
The improved IMF outlook included the economies of the euro zone, Japan, China, emerging market Europe and Russia. But the growth outlook for the United States was unchanged at 2.2 percent for this year and 2.3 percent in 2018.
And as Schoen notes, overseas trade undertaken by U.S.-based firms — not Trump-style protectionism or feckless negotiations — are giving our own economy and markets a boost:
But while the recovery in much of rest of the world lagged the U.S., most of the global economy is now seeing a delayed response to measures taken to boost growth. Those include aggressive moves by central bankers in Europe and Japan to keep interest rates low, even as the U.S. Federal Reserve has reversed its easy money policy.
"It's very easy to overlook the fact that the other two economic zones are in a very different place in terms of the monetary policy cycle," said Paul Sheard, chief economist at S&P Global.
That boost to global growth is increasingly important to U.S.-based companies, which generate a bigger share of overall sales outside the U.S. than they did a decade ago. In some sectors, including energy, materials and information technology, more than half of all corporate revenues come from outside the U.S.
So facing significant global headwinds, the U.S. stock market thrived under Obama. And now, with a global economic wind at his back, Trump is trying to take credit for the weather. Which all proves that, once again, Trump is full of sh*t (which is really just another way of saying he’s full of himself).
By the way, when he was running for president, Trump claimed the stock market was dangerously overinflated. So what happened to that?
Oh, and wasn’t Obamacare supposed to be a huge job killer? The ACA is still the law of the land, so where are all these new jobs coming from anyway?