August 29, 2017


A Presidency about Nothing Might be Good for Markets (John Tamny, 8/29/17, FEE)

Readers of this column are well aware of the opinions expressed about Trump throughout Election 2016. Most were negative owing to Trump's mistaken assertions about the bad of free trade and liberal immigration, and the good of a weak dollar.

Yet despite Trump's policy views that would seemingly be inimical to rising stock markets, they've continued to rally during his presidency. "Continued" is the operative word here in that this rally began years ago, March of 2009 to be exact. Under two presidents in Obama and Trump who believe in policies that don't normally square with economic freedom, markets have done well.

In the search for why, Fisher has answers. Writing last month, he observed a crucial finding about 2017: "we've learned Trump can't do as much as some had hoped and others feared." The previous point can't be minimized. And it requires discussion in light of the media's coverage of Trump the politician. Barack Obama's too.

It's hard not to turn on CNN each day without some headline announcing the irretrievable decline of Trump's presidency. While right-wing media regularly chronicled the no-growth, disastrous Obama presidency (mostly based on the worthless Keynesian measure that is GDP), CNN and other media outlets known to swing left are feeding their viewers a daily diet of the disaster unfolding under Trump. Yet investors plainly haven't been bothered by the alleged Trump implosion, much as they weren't fazed by Obama's economic illiteracy.

Considering Obama, though he signed into law a $787 billion "stimulus" program in 2009 that logically weakened the U.S. economy (when governments consume precious capital, there's less for private sector businesses to access) and the misnamed Affordable Care Act in 2010, the legislative portion of his presidency largely ended after that. Figure that Republicans took back control of Congress in 2010, the Senate in 2014, and the ensuing gridlock largely reduced Obama to fundraiser-in-chief. Thank goodness.

Apparently investors were relieved too. Though Obama's understanding of economic growth is charitably weak (doubters need only read Confidence Men, an account of the economic portion of Obama's presidency meant to cast him in favorable light), the fact that he wasn't able to do much after 2010 rendered his economic ignorance less of a threat to investors.

A presidency about nothing might be the path to the popularity that Trump craves even more.
As for Trump, he expresses good ideas and bad economic ideas. His thoughts on tax cuts have been encouraging, plus under him the ratio of regulations repealed to those introduced has come in at 16 to 1! Still, his views about trade are scary, anti-economic growth on a grand scale, and would normally spook investors. Yet they're not scaring investors given the simple truth expressed by Fisher that whatever Trump believes, he can't get much done.

Posted by at August 29, 2017 2:03 PM