Obama was bad, Trump was worse
Update: This Dean Baker post suggests the WSJ article is highly misleading, in which case I was too hard on Obama.
The WSJ has an article discussing some comments made by President Obama, back in February 2009. While speaking to Senator Reid, he indicated that the next day’s jobs report would be bad. It was bad, unemployed rose to 7.6%. Reid later mentioned these comments on the Senate floor.
That’s clearly something that Obama should not have done. So why do I think Trump’s actions were worse?
If you go back to that period, everyone knew the jobs number was going to be horrific. We’d recently been losing a massive number of jobs every month. No, that doesn’t excuse the action; the leak did remove a tiny tail risk that the numbers would be OK. But basically it would be pretty hard to profitably trade on the Obama leak. If you could go back in a time machine, how would you trade on that inside information? Sell stocks and buy Treasuries? Sorry, but stocks soared dramatically higher after the jobs report, and Treasuries fell as bond yields rose strongly. So Obama wasn’t really giving away any useful information:
Analysts said they were cheered that financial markets seemed to shrug off a government report showing that unemployment climbed to 7.6 percent in January as the recession deepened, a sign the job market was still far from hitting bottom.
“It’s a good sign that we’re trading up in the face of bad news,” said Ed Hyland, global investment specialist at JPMorgan Private Bank. “That’s one of the signs that you look for in the bottoming of a bear market.”
Although the statistics were grim, the so-called whisper numbers representing the most pessimistic estimates on Wall Street guessed that unemployment could have spiked to 8 percent last month, given the mass layoffs announced by employers.
Basically, Obama was leaking common knowledge that the jobs market sucked in January 2009.
Again, that’s not to defend his action; he should have kept his mouth shut. But Trump’s action was worse. Anyone who knows how Trump thinks would have interpreted his comment as an indication that a pretty decent jobs number was likely to occur. Why would Trump do that tweet if the number was going to come in worse than expected? Unlike with the Obama leak, traders who were lucky enough to see his tweet at 7:21am could have profited from the leak.
Of course the WSJ knows all of this, but chose not to publish the information. To use David Henderson’s terminology, that’s “unforgivable“.
PS. With Trump there are two types of people, those who see the elephant in the room, and those that cannot see it. Almost every day there is a new Trump outrage. When it occurs, some people dig up some sort of similar event with one of America’s previous 44 presidents. They fail to see the pattern here, the uniquely outrageous nature of Trump. It’s like a dot picture of an elephant:
Some people see the elephant, while others just see a bunch of individual dots–none of which look like an elephant.
None of Trump’s individual outrages make him look particularly awful. It’s the daily drumbeat that paints the true picture. You either see it or you don’t. For those who cannot, I can’t help you.
Interestingly, America’s white nationalists do see the picture accurately. They get it. They see how all the points fit together. That’s why they love Trump.
HT: Viking