U.S. President Donald Trump speaks to members of the media before boarding Marine One on the South Lawn of the White House in Washington, D.C., U.S. (Photographer: Andrew Harrer/Bloomberg)  

Trump Just Flunked Another Math Test

(Bloomberg Opinion) -- Back in 2006, the radio host Howard Stern gave Donald Trump, his daughter Ivanka and his son Donald Jr. a little on-the-air math test that's worth recalling on a day when Trump is tossing around a curious number.

"You went to the Wharton School of Business?" Stern asked Donald Jr.

"Yes," Donald Jr. responded.

"What's 17 times 6?"

As Trump's son struggled for an answer, his sister began to laugh.

"What is it? Do you need a calculator?" she inquired, chuckling.

"96?" Donald Jr. asked, taking stabs at answers. "94?"

"Wrong," Stern said. "Wrong!"

"That's not a practical application," Ivanka responded, coming to her brother's rescue. That prompted Stern to ask Ivanka to multiply 17 times 6 for him. Before she could respond, her father decided to bail out the family.

"It's 1,112," Trump said, pronouncing his answer "eleven-twelve." He nodded confidently toward Stern, missing the correct answer, 102, by 1,010.

A math deficit has never stopped Trump — a serial bankruptcy artist — from anointing himself a financially dexterous business sophisticate. Over the years, he and his children have positioned themselves as astute, keen-minded folks lording over a disciplined, dominant real estate operation.

"The three adult children of internationally renowned developer Donald Trump – Donald Jr., Ivanka and Eric – have forged a formidable team leading development and acquisitions for The Trump Organization," the family's business website proclaims.  

When I occasionally covered Trump as a reporter for the New York Times, I would chat with him about his business and Manhattan real estate. Trump could paint his goals and dreams in broad strokes, but questions about the most basic of concepts familiar to anyone engineering real estate deals — "cash flow" and "net present value," for example — invariably drew blanks. The Great Dealmaker and "The Apprentice" sorcerer just wasn't very good at math or finance. And he didn't really care.

That might have been OK when Trump was just a self-promoter more famous for being famous than for being a first-class developer. But he's president now.

On Tuesday morning, Trump had this to tweet:

As you might have guessed just from reading this, "increased economic value" in this context is a bogus metric, one Trump has ginned up to describe something that isn't actually happening.

Trump's $7 trillion figure refers to how much the overall value of the U.S. stock market has risen since he was inaugurated as president last year. It has nothing to do with the growth in the value of goods and services — which is known as "gross domestic product," not "increased economic value."

More important, Trump isn't presiding over "the best economy in the history of our country." Unemployment is at an 18-year low, 3.8 percent, but the unemployment rate was lower in the years right after World War II (it was 2.5 percent in 1953, for example). GDP growth is ticking along at about 2 percent to 3 percent annually, but in the 1960s it was about 5 percent annually. Wage growth is slower today than in the past and the labor force participation rate also lags.

That's not to say that things aren't good right now in many ways. They are. They're just not as good as Trump is saying.

I suspect that Trump isn't riffing on "increased economic value" simply out of ignorance. By tying an economic assessment to the stock market's ascent, Trump can clearly distinguish himself from his predecessor, Barack Obama.

The market truly has soared since Trump's inauguration, due to increased business optimism, Trump's tax cuts, deregulation and other factors. That's a clear win for Trump.

But half of all Americans don't own any stocks, and the improvements in economic indicators that affect average Americans — the steady growth in GDP and the multi-year drop in unemployment — are long-term trends that began in the Obama era and aren't Trump's to claim. He tries to, of course, but he needs more time behind the wheel before he can point to broad economic gains as reflections of his policies.

That's unlikely to keep him away from bad math, however. Trump's innumeracy and penchant for spinning is now in the service of the mythmaking he's engineering in the White House. That's a world apart from the boutique operation he ran from Trump Tower, and proper math really does matter now.

©2018 Bloomberg L.P.

Bloomberg
Stay Updated With View News On BloombergQuint