Trump Warns Wall Street His Defeat Would Endanger Market Gains
The speech before the Economic Club of New York on Tuesday was a collection of the president’s well-worn lines on the economy.
(Bloomberg) -- President Donald Trump delivered a stump speech aimed at Wall Street, touting his economic record to an audience of executives and economists while warning that a Democratic victory in 2020 would endanger stock market gains.
The speech before the Economic Club of New York on Tuesday was a collection of the president’s well-worn lines on the economy that he’s delivered in tweets, to reporters at the White House and at campaign events around the country.
Trump reiterated complaints about the Federal Reserve -- saying higher interest rates put the U.S. at a “competitive disadvantage” while offering little new clarity about trade negotiations with China, warning that the country faces massive new tariffs if a deal isn’t finalized soon.
Instead, the president said that the lower taxes, higher employment rates and market gains under his administration would disappear if he’s defeated.
“I am proud to stand before you as president of the United States to report that we have delivered on our promises and exceeded our expectations by a very wide margin,” he said. “We have ended the war on American workers, we have stopped the assault on American industry, and we have launched an economic boom the likes of which we have never seen before.”
Market Gains
Trump’s protectionist approach to trade and penchant for controversy have long made him anathema to many on Wall Street. But he sought to depict his candidacy as the natural choice for investors who wanted to protect the gains they’ve realized since he took office -- the S&P 500 is up about 36% and the Dow Jones Industrial Average has gained about 40%.
The president drew explicit contrast to his potential political opponents, characterizing them as radicals. He spoke as Democratic frontrunner Joe Biden struggles to fend off challenges from Senators Elizabeth Warren and Bernie Sanders – who have proposed massive government intervention in parts of the U.S. economy – as well as Pete Buttigieg, the relatively unknown mayor of South Bend, Indiana. Biden holds a lead in national polls but lags in states with early primaries and caucuses.
“Look at what I’m competing with on the other side,” Trump said of Democratic policy proposals, quipping the candidates “have gone loco.”
Economy Versus Approval
The economy could propel Trump, despite an electorate that largely disapproves of his presidency, according to polls.
A majority of Americans -- 52% -- approved of Trump’s handling of the economy, while just 43% said they disapproved, according to a NBC News/Wall Street Journal poll released late last month. That represents a six-point net improvement from the same survey in August, and far outpaces the president’s overall approval rating of 45%.
The president and his top campaign officials have pointed to economic models that show he should have an easier path to re-election than many analysts say. Forecasts from Yale University professor Ray Fair, Oxford Economics Ltd. and Moody’s Analytics Inc. see Trump buoyed by steady economic growth and a tight labor market.
Trump said Tuesday that U.S. economic success had enabled him to address “some of the horrible, incompetent, just terrible trade deals that have been made over the years and make them great” -- prompting applause from the audience.
Expanding Appeal
Still, the president’s remarks revealed a tension he faces as he seeks to expand his appeal beyond core supporters. Familiar attacks on the media and Democratic lawmakers failed to generate the same enthusiastic response Trump normally garners when he speaks to throngs of supporters gathered at rallies.
The president at times acknowledged as much. He thanked attendees when they cheered economic gains under his administration.
“I was waiting for that,” Trump quipped. “I almost didn’t get it.”
Trump acknowledged that his call for the Fed to provide negative interest rates had limited support in the room -- “only the smart people are clapping,” he remarked -- and his taunting of France over yellow vest protests in the aftermath of the Paris climate accord landed with a thud.
But at other points, Trump won over the crowd by ribbing his economic adviser, Larry Kudlow, and joking that his reputation among foreign leaders was earned through tough negotiations that shouldn’t overshadow his “good personality.”
The president also parried questions about whether his trade war was hurting key industries. Commerce Department data released last week showed that second quarter gross domestic product growth was the slowest in the Midwest, with Wisconsin, Michigan, and Ohio all substantially lower than the 2% national estimate. Unemployment rates have ticked up in Wisconsin, Michigan, and North Carolina -- states the president won only narrowly in 2016.
Trump argued that “real wages were soaring” for Americans -- particularly low earners. But when asked by an executive about signs economic growth could slow, he pivoted to take credit for the recent killing of Islamic State leader Abu Bakr al-Baghdadi and increases in the defense budget.
Ultimately, Trump told those in the audience that they needed to simply weigh his record against the “radical agenda of socialism” offered by his opponents.
“You have no choice because the people we’re running against are crazy,” Trump said. “They’re crazy.”
--With assistance from Josh Wingrove and Shawn Donnan.
To contact the reporter on this story: Justin Sink in Washington at jsink1@bloomberg.net
To contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, Justin Blum, Joshua Gallu
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