A United States executive branch official evading answering questions at a congressional hearing is not a new thing. But, on February 11, Attorney General Pam Bondi took the evasion to a new level.
There she was complaining that the House Judiciary Committee members asking her questions related to the topic of the hearing — oversight of the Justice Department — at which she was testifying should instead be talking up the economic miracle brought about by President Donald Trump. This achievement was demonstrated, Bondi asserted, by stock market indices rising, including the Dow Jones Industrial Average (Dow) rising above 50,000.
Bondi, proceeded in her comments to assert regarding the Dow reaching its new high that “they said it couldn’t be done in four years, yet President Trump has done it in one year.”
Of course, there are many factors that cause stock prices to go up and down, not just the actions of one person — even when that person is the president of the United Sates. Also, it is an often repeated mistake to equate a high or rising stock market with health of an economy. Indeed, all time highs in stock markets are a regular occurrence in the transition to big economic downturns, and those downturns are often accompanied by stock prices returning to lower levels last seen years earlier.
Yes, the stock market went up in the major indices of the Dow, S&P 500, and Nasdaq in the first twelve months of Trump’s current term — a time period that ended about three weeks before Bondi’s testimony. But, that is not novel. Looking at the S&P 500 performance in the first year of US presidents, John Towfighi reported in a January 25 article at CNN that it has been 25 years since stocks went down in the first year of any presidential term and that the percentage gain in the first year of Trump’s second term was less than in each of the four immediately previous presidential terms — Barack Obama’s two terms, Trump’s first term, and Joe Biden’s one term. Considering this comparison, it seems odd for Bondi to have been expressing amazement concerning what amounts to underperformance.
Bondi made her comments about the Dow being above 50,000 during a period of less than a week when the index closed above that number. Since then, the trend has been down. On March 20, a little over a month after Bondi’s evasive boast on behalf of her boss at the House committee hearing, the Dow closed at 45,577.47, an over nine percent drop from the closing high of 50,188.14 reached on February 10. The Dow has moved up a little in the days since March 20.
It will not take much more of a drop in the Dow and other stock indexes for their values during Trump’s second term to not even have kept up with inflation as it is underreported in official US government statistics. Thereafter, all the nominal — unadjusted for inflation — gains during the second Trump term could be given up. The Dow is already over halfway to that destination. And, as pointed out by economist and investor Peter Schiff in a February 13 video commentary, when the Dow was over 50,000, the stock index had actually plummeted by 40 percent since Trump’s inauguration priced in gold.
Given the stock market drop since her February 11 testimony, maybe Bondi can return to Congress to actually answer questions. She may, though, just offer a fresh reason for evasion instead.
