The last week has been brutal for the stock market. Measured by loss of shareholder value, last Thursday and Friday represented the worst two-day stock market wipeout in history.
Using a few different, and slightly more generous, measuring sticks, the recent market meltdown could be thought of as in the same neighborhood as the bursting of the dot-com bubble, the 2008 financial crisis, or the 2020 COVID crash.
Yet, unlike so many market shocks before it, Donald Trump’s “Annihilation Days” seemed almost entirely attributable to the whims of one man who routinely expresses incorrect views about how the economy works.
Trump probably would not have slapped a bunch of tariffs on our trading partners (and a few uninhabited islands) if he did not genuinely believe that would somehow end up being good for the economy (or at least good for him). Plenty of resources out there explain why tariffs are not going to bring back U.S. manufacturing jobs and will, if they stay in place, likely be a long-term economic disaster.
Rather than explaining the economics of tariffs once again here, let’s instead look at the right-wing disinformation springing up — even in some quasi-legitimate news sources — claiming that driving the stock market into the dirt was part of Trump’s grand plan all along.
This was not something that Trump planned all along. How do I know that? Well, for one thing, Trump ran on the assertion that he would be far better for the stock market than his opponent. “If we lost this election, I think the market would go down the tubes,” said Trump late in October. Perhaps he said “lost” when he meant “won”?
That was far from the only time Trump anticipated that the stock market would boom under him, and decried the actually booming stock market under Biden as solely a result of a probable Trump election win. Before Trump was reelected and started implementing his disastrous economic policies, he did this at least dozens of times.
Trump has completely flipped his position now. While he was crashing the stock market late last week, Trump shared a video on his dumb Truth Social social media platform which indicated that he was indeed intentionally causing the stock market to fall in furtherance of his broader economic plans. Two days later, running cleanup, the director of Trump’s own White House National Economic Council repeatedly denied such claims on TV, saying, “He’s not trying to tank the market.”
Let’s all recollect that it’s not like the stock market was exactly fantastic even before last week. I wrote about a more modest stock market rout that Trump caused a month ago. It’s almost as if Trump thought all his insane whims would be good for markets, but now that it’s clear they’re not, he’s just making up excuses like he always does when he causes unpopular things to happen.
Look, let’s pretend for a moment that Trump’s defenders are right that huge mindless tariffs will ultimately be an economic godsend. In that case, why on earth would the stock market collapse on news of new tariffs being imposed? It’s not like the stock market is the longest-term predictor out there, but it generally likes things that a majority of traders think will be good for the economy over any relevant time period. You see, stocks go up when there is a consensus that the companies whose securities are being sold will be worth more in the future than they are today.
Claims that Trump intentionally crashed the stock market or that it is all part of his broader economic plan are nonsense. The “concepts of a plan” guy has no broader economic plan. Presidency by jump scare does not seem to be going so well.
Trump thought the stock market would soar during a second Trump term, and repeatedly expressed that belief. Now that he’s being proven wrong, he and his most ardent supporters are simply trying to rewrite history.
Jonathan Wolf is a civil litigator and author of Your Debt-Free JD (affiliate link). He has taught legal writing, written for a wide variety of publications, and made it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at jon_wolf@hotmail.com.
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