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Originally Posted by Chicks
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No, Krugman is not correct, nor would he even try to be in the context of an interview like this since he's a cheerleader for economic policies that would be unlikely to find daylight in a Trump administration. That's why - around the 19 second mark in the video - the interviewer laughs when Krugman makes his "essentially zero" remark.
Krugman goes on to be even less correct seconds later when he says that that "there have been no policies, right?". In fact, at the point that the interview was being taped, the Repub tax reform bill was being voted on in the House and Senate, and was largely expected to pass as of the date the interview was conducted. Its commentary like this that has prompted me to regard Krugman's musings as - by and large - intellectually dishonest.
But even discounting that, a very significant EO - largely ignored by Trump critics - was Executive Order 13771 which cut two regulations for every new one promulgated. This signaled a significant shift in the regulatory environment in Washington, and one element often cited in a rising stock market is the expectation of a more favorable regulatory and tax environment.
Couple that with the gross domestic product which is rising beyond expectations, consumer confidence is at a 17-year high, and you have the ingredients for a significant rise in expectations for the economy which is reflected in stock prices.
Look, I wouldn't expect the "anti-Trump" crowd to give the guy any credit for rising stock prices. On the other hand, I suspect that Krugman and other anti-Trump types would be the first to blame Trump and the Republicans for "driving the economy into a ditch" if there were any retreat in stock prices. Its the nature of politics. But political forums make lousy places to get to the truth about what's happening in the economy.
Does Trump get to take all the credit? No, certainly not. Can some of the rise in stock prices be tied to expectations about a more favorable tax and regulatory environment for business, and are those expectations attributable to this administrations stated goals and policies? Absolutely, and I think we've seen that. Is some of the growth a natural part of cyclical economic trends that would occur regardless of who sits in the Oval Office? Yes.