the national interest

‘Stocks Are Owned by Everybody,’ Says Trump. Not Even Close.

Photo: Sean Rayford/Getty Images

President Trump’s town-hall discussion on ABC last night produced the usual blizzard of lies, but one of the lies was especially interesting. At one point, George Stephanopoulos asked Trump about the “K-shaped recovery,” a phrase analysts have used to describe the divergent prospects of the affluent and the working class. Stephanopoulos suggested that Trump’s constant citing of stock-market gains has no bearing on the living standards of most Americans. Trump insisted, to the contrary, that basically everybody owns stocks.

Trump’s answer is worth reading in full, in part because he was so adamant:

George, stocks are owned by everybody. You know, they talk about the stock market is so good, that’s 401(k)s. I’m meeting people with — as long as they didn’t sell when the market went down, when we first realized the extent of this horrible thing from China, I mean these people are doing — some of them are doing better than they were doing before the pandemic came.


They — if people held on to their stocks — and remember this, because I notice you say wealthy, sure wealthy, but you have people that aren’t wealthy but have done well because of the stock market.


I have — I’ve set records on the stock market even during the pandemic. And that doesn’t happen by accident.


I will tell you this, if Joe Biden ever got this position — and that’s a headwind on the stock market — our stock market would be much higher if it weren’t for that. If Joe Biden ever got in, I think you’d have a depression the likes of which we have never seen in this country.


If you look at his policies, where he wants to raise everybody’s taxes, you look at what he wants to do in terms of regulation, where he wants to put all of the regulations back on that I took off and then some — and in many cases, double it up. You will have a depression the likes of which we haven’t seen in this country. And that doesn’t affect big people, it affects everybody. It affects a person that owns $10,000 worth of stock in IBM or whatever company it may be.


Look, we’re having a tremendous thing in the stock market, and that’s good for everybody. But people that aren’t rich own stock, and they have 401(k)s. You take a look at the 401(k)s, they’re in many cases better than they were before the pandemic came.

As a factual matter, Trump is clearly wrong. Only half of the American public owns any stock at all. Of the half that does, ownership is concentrated overwhelmingly at the top. And 84 percent of stocks are held by the wealthiest 10 percent of the public, and the wealthiest one percent have an outright majority:

Graphic: The Financial Times

But the interesting question is not that Trump lied, but whether he knows he lied.

One of Trump’s advantages over other Republican candidates is that he absorbs conservative thought not at the level of movement elites, but at the user end. He does not read a lot of Wall Street Journal editorials, but he does watch a lot — and I mean a lot — of Fox News. This has given him a strong feel for the actual demand for Republican politics. Unlike, say, Mitt Romney and Paul Ryan, he has never deluded himself into thinking Republican voters are eager to scale back progressive taxation or the welfare state. He grasps, and shares, the gut-level cultural and racial resentments.

That was reflected in Trump’s 2016 campaign. Where Romney designed a campaign targeted to business owners (“You didn’t build that/I built that” was his primary theme), Trump posed as an outsider who would take on the rich. He promised to increase his own taxes and postured as a threat to financial elites.

It was always clear to those paying careful attention that this message was a con. Trump, predictably, implemented a standard-issue Republican program focused on a massive regressive tax cut and putting lobbyists in charge of regulating business. But he has mostly acted like somebody who understands that he’s engaged in a bait and switch. Trump doesn’t talk about the tax cuts very often, even though it is his only major legislative achievement. He spends far more time pretending to have been the author of Obama’s Veterans’ Choice Act and the Affordable Care Act than his own tax cuts. He seems to realize that his payoff for rich Republican donors does not play well with the voters.

And yet, his comments about stocks seem to indicate a real obliviousness. It’s possible Trump does believe the stock market is the economy. He speaks mainly, and perhaps exclusively, with rich people, and seems to mix in Fox Business — which is targeted at the stock-owning class — with his regular Fox News.

This belief would also explain his complacent stance on economic stimulus. Trump’s true-believing supply-side advisers think the recovery is doing great and equate the market with the overall economy. They don’t see Democrats’ offer of another $3 trillion in relief as necessary or even desirable.

Obviously, Trump needs some kind of spin on the state of the economy. But a message that everybody’s in great shape because of the stock market is not going to resonate with the tens of millions of people who have lost their jobs and don’t have stock. If Trump has convinced himself the economy is back in shape because the stock market is up, he’s genuinely lost touch.

‘Stocks Are Owned by Everybody,’ Says Trump. Not Even Close.