Trump was a goose, but he laid golden eggs


For the first time ever, the Dow Jones index has passed 30,000 the other day. It came close to doing so back in February, peaking at 29,500. Then COVID happened and the rest is history. That the stock market has recovered so quickly – while still in the middle of the pandemic, and with further lock-downs looming in many states – is a bit of an early Christmas miracle in a year that badly needs one. More realistically, it’s perhaps a COVID vaccine miracle, with the three vaccines announced so far already boosting optimism months before they begin boosting immunity.

Stock market is not the best indicator of the health of the economy. For one, it’s prone to overexuberance and bubbles. In truth, every market is open to speculation that inflates the value in question to levels divorced form the underlying fundamentals – but stock market is particularly prone to wild mood swings. There are, fortunately, far better and more immediately meaningful indicia. As Christopher Caldwell notes in his thoughtful long piece about the election (as they say, read the whole thing),

Trump didn’t sell out his supporters. In fact, his presidency saw something extraordinary, even if it was all but invisible from the country’s globalized cities: the first egalitarian boom since well back into the twentieth century. In 2019, the last non-Covid year, he presided over an average 3.7 percent unemployment rate and 4.7 percent wage growth among the lowest quartile of earners. All income brackets increased their take. That had happened in the last three Obama years, too. The difference is that in the Obama part of the boom, the income of the top decile rose by 20 percent, with tiny gains for other groups. In the Trump economy, the distribution was different. Net worth of the top 10 percent rose only marginally, while that of all other groups vaulted ahead. In 2019, the share of overall earnings going to the bottom 90 percent of earners rose for the first time in a decade.

Many commentators (including Josh Barro, Brookings and the Hamilton Project) partly credit increases in minimum wage for the wage growth at the bottom. If that’s the case, and since minimum wage rises generally lead to job losses, the fact that unemployment actually continued to fall at the same time is a testimony to the strength to the broad-based economic growth under Trump. Trump the nationalist never believed in Managed DeclineTM of the United States – and part of that was the refusal to accept and go with the slow death of manufacturing and blue collar jobs (contra Obama in 2016: there is no “magic wand” to bring those jobs back).

This accounts for at least some of the increase in Trump’s vote among blacks and Hispanics (particularly in the poorest, working class parts of Florida and Texas) who are overrepresented in manufacturing, construction, transport and logistics. While the majority of the 20 per cent of those exit-polled with a union member in their household still voted Democrat (56 to 40 per cent), it’s a safe bet that this majority was skewed towards public service and white collar unions. A pre-election internal poll of members of North America’s Building Trades Unions showed a dead heat between Trump and Biden.  As Zach Menke, a pipefitter and a member of the Ohio State Building and Construction Trades Council told a reporter back in October:

Look, I’m not a huge fan of Trump as a person or some of the other things that he may say or do, but when it comes to the values that I support and work in bringing infrastructure back into this country, I think that that has a lot to do with why he got elected four years ago,” he says. “And I think that that’s going to have a lot to do with why he’s going to get elected again.”

Trump didn’t in the end (or did he?) but the fact he came so close, within a few tens of thousands of votes in a handful of states, owed much to sentiments like Menke’s. Not surprisingly – except for the election result itself -it was really popular:


Like Menke, you might not have found Trump appealing as a man or a politician, but he delivered. He might have been a goose, but he laid golden eggs. Alas, the return to a political “normal” under Biden is as likely to lead to the return to an economic “normal” of the past few decades. As they say, in a democracy, everyone gets what the majority deserves, and they get it good and hard.