Trump launches early blame game on markets and the economy

The president looks to blame Democrats and the Fed for declines in the stock market. Analysts cite many other explanations.

By BEN WHITE 10/30/2018 05:10 PM EDT

President Donald Trump is setting up a simple strategy if markets and the economy cool over the next two years: Blame Democrats and the Fed.

In recent days, Trump and his senior advisers have repeatedly argued that recent turbulence in the stock market reflects investor fear that Democrats will retake the House in the midterm elections next week. “If you want your Stocks to go down, I strongly suggest voting Democrat,” Trump tweeted Tuesday. And he has repeatedly bashed the Federal Reserve in recent interviews for its modest campaign of rate hikes.

The Trump campaign’s closing ad of the midterm cycle — using footage from the 2008 financial crisis — suggests that handing power to Democrats would bring back sky-high unemployment. “I think election risk is a big part of this correction,” Larry Kudlow, Trump’s top economic adviser, said in an interview. “The market doesn’t want to see an overturning of the business tax cuts or the deregulation or the energy boom. Until this is settled, it’s going to be hard.”

Economists and market analysts say these arguments bear little connection to reality.

Instead, they note that the economy is following a pattern many predicted when Trump and Congress slashed corporate tax rates last year: a period of faster growth followed by a return to the pace of around 2 to 3 percent that has persisted for nearly a decade with annual deficits rising.

more
https://www.politico.com/story/2018/10/30/trump-democrats-markets-economy-949477