President Trump has a unique talent: convincing people he won’t rip them off.
There’s just one problem. Whether you’re talking about his bondholders or his shareholders or his contractors or the students at his university, it’s fair to say that Trump has a long record of disappointing everyone who puts their trust in him. It’s the same schtick every time. He promises to make “every dream you ever dreamed … come true” — that’s what he said during the campaign — but that is the case only if all your dreams involve getting less money than you thought you would or getting a degree that isn’t worth a thing.
And now Wall Street is finding that out.
It started on election night. Trump’s shocking win had sent markets into a tailspin — would he start a trade war or an actual war or who knows what else? — before they started to wonder whether he’d really be so bad for them. At which point he said the magic words: “We’re going to rebuild our infrastructure.” Of course, that was something he’d talked about quite a bit during the campaign, but a lot of things he’d talked about were, well, contradictory. It was hard to tell what Trump simply thought was a good tweet, and what he also thought was a good policy. So the fact that rebuilding our “highways, bridges, tunnels, airports, schools, hospitals” was the first thing he mentioned in his victory speech seemed to suggest that it would be a major priority, which a few days later he said would run upward of $1 trillion in what Wall Street now hoped would be an administration filled with tax cuts, deregulation and stimulus (oh, my!).
Who could have guessed that it wouldn’t? At least not anywhere near as much as markets were assuming a few short weeks ago. Indeed, the latest reports are that Trump’s 13-figure infrastructure plan has been relegated to an election-year ruse. That Republicans will instead focus on repealing the Affordable Care Act and cutting taxes, and then sometime next year try to use a plan to rebuild roads, bridges and all the rest to divide Democrats who supposedly would be torn between their hate for all things Trump and their love for public works. Which is to say that a building boom probably isn’t going to happen. Congressional Republicans don’t really want to do it, and congressional Democrats don’t want to do it the way Trump does with tax breaks rather than direct spending. And no, Trump isn’t going to bully them into it when they’ve already offered up their own plan.
The point is that you shouldn’t take Trump seriously or literally. He just says whatever his audience wants to hear. That works when you’re running for president, but not when you’re acting as president. Take Trump’s support for a “border tax.” That may sound like he’s endorsing an controversial idea by House Speaker Paul D. Ryan (R-Wis.) to overhaul the corporate tax system so that domestic consumption — including what we buy overseas, but not what we sell — rather than global profits are taxed, but, well, it’s not clear. Trump, you see, has used the words “border tax” to refer to outright tariffs, to a tax on companies that outsource jobs and, yes, to Ryan’s “border-adjustment tax.” Which one did he mean? Good question.
Wall Street is banking on something that’s no more real than a Trump University degree.
Matt O’Brien is a reporter for Wonkblog covering economic affairs. He was previously a senior associate editor at The Atlantic.