Trump Should Pay Less Attention To Stock Market Mood Swings

Donald Trump may watch the stock market more closely than any day trader.

For a president who underlined the increasing importance of working-class whites to the GOP coalition and who trampled so much bipartisan economic orthodoxy during the campaign, to be so overtly obsessed with the stock market is a strange disconnect.

In fact, no president in memory has so publicly staked himself to the market. Trump has, in contrast, paid relatively little public attention to wage growth, which is the measure that more closely tracks with his particular political project (especially considering that his election prospects may again depend on Pennsylvania, Michigan and Wisconsin).

Why the focus on the stock market? For one thing, it’s impossible to avoid. The stock market numbers run in little boxes in the bottom right-hand corner of cable-news TV screens. Big gains or drops make front-page news. The market’s performance affects how people feel about the economy on any given day.

On top of all this, the market clearly acts for Trump like poll numbers or TV ratings - immediate, easily digestible feedback on his perceived worth, or that of his economic stewardship.

This isn’t how he should view it, and it was shortsighted to be so boastful about the good times.

The stock market goes up and down. Trump didn’t have sole responsibility for the run-up in the market after his election (although taking the regulatory boot off the economy helped) and doesn’t deserve the blame for the downward trend now (although the contention with China and general sense of chaos don’t help).

Trump has lashed out at Federal Reserve Chairman Jerome Powell for being too tight on interest rates, and he might be right. But the president should be less beholden to the gyrations of the market.

Wages would be a worthy new object of his attention. Trump has the ability to shift the public conversation onto ground of his choosing, and it’d be better if wages didn’t often take a back seat to the stock market and GDP growth.

Trump has a story to tell here. A historically low unemployment rate is having an effect. Wages grew at a 3.1 percent rate year over year in October and November, the highest level since 2009.

When Trump hears complaints from employers that they are having trouble hiring, his answer should be: “Good. Pay your workers more.”

On the other hand, the political downside of focusing on wages is twofold: Like the stock market, it is a metric that the president doesn’t have direct control over, and unlike the stock market, it hasn’t mostly enjoyed strong upward momentum over the past couple of decades.

Oren Cass of the Manhattan Institute and author of the thought-provoking new book “The Once and Future Worker” argues that the point of comparison shouldn’t be whether wages are better than they were in post-crisis 2010, but how they are doing compared with business-cycle peaks in 2007, 2000 and 1989. Here they are lagging.

Wages are ultimately related to productivity growth, which has been growing more slowly than in the golden age of the American economy in the mid-20th century.

Robert Atkinson of the Information Technology & Innovation Foundation argues forcefully that policymakers should make fostering productivity growth their foremost goal.

For his part, Cass suggests a worker-friendly, longer-term agenda of reforming education to put more emphasis on the interests of students who won’t go on to get a four-year college degree; changing our immigration system to keep the lower end of the labor market as tight as possible; and exploring innovative models of unionization to give workers more leverage.

Maybe these particular initiatives aren’t to the liking of the White House, but a working-class Republican should have an agenda very specifically tailored to the interests of workers. Alternately bragging and complaining about the stock market isn’t a substitute.

Rich Lowry is editor of National Review.