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The political peril of taking credit for a booming stock market

As the stock market dropped sharply on Monday, President Trump was in Ohio to make his case for the Republican tax plan. How does the current economy affect politics? What are the dangers for taking credit? Amy Walter of the Cook Political Report and Tamara Keith of NPR join John Yang to discuss the selling of the Republican tax plan, plus the pressure to release a Democratic House memo.

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  • John Yang:

    But first: As the stock market dropped sharply this afternoon, President Trump was in Ohio to make his case for the Republican tax plan.

    To talk about the political fallout of the current economic landscape, it's our Politics Monday team, Amy Walter of The Cook Political Report and Tamara Keith of NPR.

    Tam, let me start with you.

    You recently, before the State of the Union, dissected Donald Trump's speeches. He likes to talk about the stock market when it was going up, but today he had the very awkward situation of being live in Cincinnati, giving a speech, with the box in the corner on cable television showing the Dow dropping, dropping, dropping.

    Is he at risk here?

  • Tamara Keith:

    Yes, until the cable networks cut away entirely from his speech and just went to coverage of the Dow.

    The interesting thing is that, up until Thursday of last week, President Trump was very regularly in his speeches talking about the amazing wealth growth that has happened as a result of the markets since his election. After Thursday, no more mentions of the stock market.

    And that's the thing. Talking about the stock market was never a great idea for a politician, because stocks are volatile, markets are volatile, and they aren't the economy. To be clear, the stock market is not the economy.

    Today, the White House put out a statement essentially saying just that, that the stock market is not the economy, the fundamentals remain strong, which is true, that job growth has been strong, and wages even grew quite significantly in the last month.

  • John Yang:

    Political peril talking about the markets??

  • Amy Walter:

    Well, I think that Tam summed it up pretty well.

    That's always the danger. It's why every economist and every political person tells you never to put your — don't put a lot of stock in the stock market in terms of a talking point. Right?

    (LAUGHTER)

  • John Yang:

    I see what you did there. I see what you did there.

  • Amy Walter:

    See what I did there?

    But the issue really now for 2018 is the state of the economy. How do people feel about the economy, and do they feel as if these tax cuts that Republicans say has been part of the reason for the recovery of the economy, as well as the deregulatory efforts, do voters give them credit for those, do they give the president credit for the improving economy?

    Right now, the country, not surprisingly, is pretty divided on this. You still have more voters than not saying they believe that it's Barack Obama's economy, right? He should get more credit than Trump, although that has been narrowing.

    And on the issue of taxes and whether that is playing a role, the country, again, is not quite as convinced, that that is part of the debate. They are still split on whether the tax cuts are a good or a bad thing. They do believe the economy is doing better, much better, but, again, very polarized.

    You ask Democrats how the economy is doing, they are not as optimistic as Republicans about the economy. So your views on the economy, different depending on your partisan standing, and they also are different from your view of the president and of Republicans.

  • John Yang:

    Let's talk about the tax plan.

    There was a Monmouth University poll. We have some numbers. In December, the disapproval was 47 percent, approve 26. January, last month, split, 44 percent approve, disapprove. The president is out there selling the tax plan again today.

    Over the weekend, House Speaker Paul Ryan got a little blowback on Twitter for touting — someone had — a school secretary, I think it was — touting a $1.50 a week benefit from this tax cut.

    Is this going to help them or hurt in the midterms, Tam?

  • Tamara Keith:

    That tweet wasn't a great anecdote. That tweet is not how they want to be selling this tax plan.

    However, the president — I mean, today is not a great example, because he went very far off-script while out trying to sell the tax plan. But Republicans believe that their path in 2018 is a strong economy, that their ability to sort of overcome the typical thing that happens in a midterm year, which is that they would just get wiped out, their path to overcoming that is selling this tax proposal, selling this tax plan, having people believe that it's working for them, and selling it in a way that Democrats in 2009 didn't really sell the stimulus.

    You know, by the end of 2009, most people believed that their taxes had gone up, even though they had a tax cut in the stimulus, and Republicans do not want to make that same mistake.

  • John Yang:

    Is this a big message for them? Obviously, they're out there pushing it still. Is this key to them, to the Republicans for the midterms?

  • Amy Walter:

    Absolutely.

    They are counting on the optimism that Americans have now about the country to translate into support for Republicans, right? The Republicans are here, the economy is doing well, don't rock the boat, don't take us off course.

    The challenge, though, is one person who is supposed to do the selling and has certainly promoted himself as one of the best salesman of all time is not particularly a disciplined salesperson, number one.

    And, number two, views of the tax plan do line up pretty directly with your views on President Trump. The reason that you saw those numbers climb in that poll that you showed from Monmouth is, you also should show that the president's approval rating rose from December until this month.

    And so, if you like the presidents, right now, you will like the tax plan. If you don't like the president, you don't like the tax plan or you're undecided on the tax plan. And that's the group of voters right now that both sides are fighting over.

    In fact, Democrats, too, are a little bit concerned now. A lot of Democrats were convinced when this vote was happening that they were going to be able to cast this as a corporate-only plan that was going to hurt the middle class. Now that you have the economy doing well, bonuses are going out to people, and whether it's $1.50 or $200 coming back, that's a very good message for Republicans to sell.

    I'm hearing now from some Democrats who worry that we need to do what Republicans did in 2009 and 2010 to Obamacare, which is to continue to put it in a negative light and make our messaging stick.

  • John Yang:

    Tam, late today, the House Intelligence Committee voted unanimously to release the Democratic response to the Nunes memo.

    It now goes to President Trump, who has to decide whether or not he wants to declassify that. Is there pressure on him, having said he's doing this in terms of transparency, to release, declassify the Democrats' memo as well?

  • Tamara Keith:

    There is absolutely a pressure on him, and he has a five-day deadline, just like he did with the Republican memo.

    The president has said that the Republican memo vindicated him. He has been just talking up this memo, loving this memo, and really taking hits at the Democrats on the committee. So it's going to be tough for him to want to declassify it. But the White House insists that it will be reviewed through the same process.

    The question really is, the Republican memo was fully declassified, no redactions. What will the Democratic memo look like in five days, if they agree to let it be released?

  • John Yang:

    Less than 30 seconds.

  • Amy Walter:

    I think, fundamentally, we're going to find out — maybe not now — maybe it's going to be in a couple of weeks — whether this is just another party skirmish, which there have been plenty of, within this committee, or whether we're having a real substantive move here and a real break between thee Republicans and the president on this issue.

  • John Yang:

    Amy Walter, Tamara Keith, thanks for being here.

  • Amy Walter:

    You're welcome.

  • Tamara Keith:

    You're welcome.

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