The Stock Market Actually Tanked After the GOP Passed Tax Bill on False Promises
John Harwood, a CNBC correspondent, had some pretty bad news for the Republican Party on Monday.
"Dow Jones Industrial Average is down 1,111 points, or 4.4%, since Congress passed tax cut last December," Harwood said in a tweet.
By the end of the trading day, the Dow had lost more than 450 points. This slide comes following President Donald Trump's attacks on Amazon and China's announcement of new retaliatory tariffs.
But the market is down overall from its high in January. Trump has celebrated each new milestone but largely ignored the crashes. Even last week, he was tweeting about a surge, only to ignore Monday's downturn.
Of course, many factors impact the stock market and fluctuations are the norm. No president or Congress can be held accountable for every swing in the market.
Harwood's point is important because the tax bill was supposed to be a major boost for the economy. Gary Cohn—Trump's former chief economic adviser and herald of the tax law—predicted that the tax bill would drive a surge in the market.
"If you look at what the tax plan is going to do, I don't think it is factored in," he said. "So I think there is a lot more momentum in the stock market."
While January saw an uptick in the Dow, that has now completely disappeared. We've entered negative territory.
One shouldn't imply that the tax bill caused the dip in the market—that's far too simplistic. It will be a while before for the legislation's true effects are known. Even when the data is in, analysts will disagree about interpretations. It's also likely that other steps the Trump administration has taken, like the looming trade war, have spooked the market. But that's not a defense of Republican economic management.
But recent developments just don't support the Republican theory that the tax law, which came with a hefty price tag of $1.5 trillion over ten years, was any major boon to the economy.