The market saw another big sell-off this morning, which followed several other large sell-offs earlier this month, and Trump's top economic adviser Larry Kudlow has identified the culprit!
Markets are worried, Kudlow says, because Democrats might roll back the policies that are failing right now.
The recent sell-off in stocks reflects fear that Congress will be remade in the upcoming election and pro-growth policies will fall by the wayside, according to White House advisor Larry Kudlow.
Kudlow, speaking to reporters outside the White House on Tuesday, blamed the market decline on the midterm elections. "I think the stock market is worried that Congress will change and will overturn these pro-growth policies," he said. The "correction has to overcome the uncertainty about this election."
Even if Democrats regain control of the House of Representatives, they won't be able to roll back Trump's tax cuts. Even if Democrats regain control of both chambers of Congress, they won't be able to roll back Trump's tax cuts. As long as Trump is in the oval office, he will veto any attempt to do so.
With that obvious fact out of the way, we can talk about the real reason the market if faltering.
Global economic growth is slowing and several industrial giants led by Caterpillar saw their stocks tumble this morning because their most recent outlooks predicted lower sales and higher costs. More specifically, Caterpillar lowered their forecast because Trump's trade war is raising the cost of virtually everything from materials to shipping.
That's just one example.
The fact is Trump's tax cuts injected over a trillion dollars of fake earnings into the market and almost all of it was channeled into the pockets of executives and shareholders. Even the most optimistic and generous estimates predicted that Trump's tax cuts would lead to a small surge in growth followed by stagnation because it would not fundamentally change the way anyone does business.
It's a sugar high that was bound to wear off at some point. That doesn't mean it wore off today, but it's coming. And when that day comes, you can bet Trump and the GOP will try to blame Democrats for it even though it's Republican policy. They may even try to blame President Obama.