The Stock Market Is Not the Economy

Media Parroting Nonsense

Democrats and their clones in the corporate media are scaring themselves and, along the way, trying to frighten voters senseless. Real power is fear, someone once said. What will voters think of Democrats if President Trump’s tariffs work? Donald Trump, who promised voters he would revitalize US manufacturing, is using reciprocal tariffs to encourage growth.

David Catron in Real Clear Politics discusses the unpleasant combination of dread and confusion for anyone taking seriously Democratic rhetoric. Democrats face an uncomfortable position in that their own presidents recently and routinely deployed tariffs.

For example, President Obama imposed a 35% tariff on Chinese tires, and President Biden deployed a 25% tariff on Chinese steel and aluminum. Yet voters, notes David Catron (posted originally from Spectator), are expected to believe that Trump tariffs will somehow plunge us into a recession, something comparable to the Great Depression.

The media is parroting Democrats’ talking points.

A wide variety of “news” outlets have blamed the recent Stock Market slump on Trump’s tariffs. Nonetheless, as the President’s Treasury Secretary Scott Bessent told Tucker Carlson on Friday, “For everyone who thinks these market declines are all based on the President’s economic policies, I can tell you this decline started with the Chinese AI announcement of DeepSeek.”

How is the media portraying this? By continuing to diagnose the country’s economic health based on the day-to-day DJIA, and disregarding the following admonition from former Clinton Labor Secretary Robert Reich, “Repeat after me: The stock market is not the economy.”

Remember back in your high school days when you first learned about a federal tariff law? Well, no, honestly, nor do I.

“Economically illiterate” teachers enjoyed sharing info about the Smoot-Hawley Tariff Act, implemented in 1931. It caused the Great Depression, teachers assured insouciant students. A quick internet search will show you dozens of articles comparing Trump’s tariffs to the Smoot-Hawley.

Oddly, it’s difficult to find any article connecting free trade to the nation’s decimated industrial base. One of the few exceptions, Mr. Catron reports, was published in the Wall Street Journal by John Michaelson:

Perhaps the worst part of America’s [free] trade policies is their legacy of deindustrialization. Swaths of the country once proud of producing steel and aircraft are now better known for opioid abuse. The death of American industry has exacerbated inequality by eliminating millions of high-wage jobs across America that didn’t require high levels of education. Deindustrialization curtails American innovation, since production breeds know-how and invention. The end of American industry ultimately means the end of American power.

Joe Biden’s administration not only kept tariffs in place but also expanded them to cover other manufactured goods. In a PBS interview, Janet Yellen, former chair of the Fed, confirmed that no price increases were associated with new tariffs. From Yellen, “I don’t believe that American consumers will see any meaningful increase in the prices that they face.”  In other words, carefully calibrated tariffs have little or no effect on prices.

Which leads us to Mr. Catron’s conclusion: Democrats and their compliant media hacks are terrified that Trump’s tariffs will work as intended. What then? When fear loses power, reaction from the snookered public will be harsh. Voters would be convinced that, yes indeed, they did make the right choice last November. Thank goodness, no Harris, no Walz. No longer can Democrats be trusted on anything relating to the economy.

Those USW and UAU members the Democrats lost last year will look at falling fuel prices, the secure southern border, and a recovering industrial base and conclude that Liberation Day was Jan. 20, 2025.