Trump takes credit for what he inherited.

There are some big economic trends. Trump is an inheritor of good ones.

Wall Street Bull.  Trump takes credit.

But Democrats should beware. He is an effective cheerleader and salesman. He takes credit.

At rallies, on Fox, in his tweets, and in his speeches Trump calls attention to the current strong economy. Look what I did.

Barrack Obama's speech in Illinois noted that the recovery started under him, not Trump, but it is too little, too late. Democrats were afraid to call the economy good in the fall of 2016, especially while Republicans were calling it miserable. On inauguration day Trump called it "carnage." Two months later he called it wonderful.

He sold it, and Trump can sell.

What is the reality behind the salesmanship?  What are the actual trends?

Start with the value of American businesses, measured by SP500 prices, i.e the stock market:

Stock Prices for a Century

What do we see here? This is a logarithmic chart showing a long, deep established pattern. The stock market has gone up over time. Take a close look at the very right part of the chart, the past twenty years. We see there was a zig zag spot when the market fell sharply in 2002-03 and again in 2008-09, ending right after Obama's inauguration (March, 2009). Then  it has moved up steadily for about nine years--seven of them under Obama and now some 19 months under Trump. Trump inherited a bull market.

What might explain the market rise? Corporate earnings. Business values go up in part because they are earning more money and therefore the companies are worth more. So let's look at the trend on corporate earnings.  

Corporate Earnings for a Century

Earnings are more jagged as we go through period of economic distress, including the big dip for the Great Depression of the 1930s and the Financial Crisis of 2008-09. Look closely at the last decade. Earnings began recovering sharply right after Obama's inauguration in 2009 and in two years had recovered to the long term trend line, and are continuing. There had, in fact, been "carnage." That is what Obama inherited. Trump inherited a well established recovery.

We hear Donald Trump talk about unemployment. I see "We're Hiring!" and "Help Wanted!" signs everywhere. What is the trend here?  Let's focus on the past ten years:

Unemployment rate

The chart can be described simply: the rate was going up through 2009 during the earnings collapse, and then has a nine year steady downtrend. Trump did not change the trend. Trump inherited a trend of job recovery and falling unemployment.

Summary: 

Trump is a lucky man, but he helped create his political luck but selling himself as a creator, not an inheritor. He has had a lifetime experience with this, and it is working for him. Trump successfully defined improving trends by what they were not--not good enough. Then, once in office he immediately switched positions and said things were terrific. He was helped in shaping this message by the sharp positive upward response of the stock market to his election. Investors correctly anticipated that he would push policies that relaxed the regulations on fossil fuel producers for environmental reasons, and on banks to address the excessive risk-taking that caused the financial crisis.

And, indeed, Trump's policies have been good for the investor class, so far at least, measured by better corporate earnings, higher stock prices, lower taxes for investors and inheritors. 

But there was a reason regulations were put onto banks. Lowering credit standards and investors reaching for yield are the signals of market tops. Investors have reason to be worried.