If Trump’s so terrible, why all the optimism?
So obsessed is much of the news media with mounting resistance to Donald Trump and expressing outrage at his antics that it is underreporting and outright missing a big part the real post-election story, for example the rise in the stock market, increasing expansion of the economy, and growing consumer confidence.
A couple of weekends back, The New York Times got a hold of itself and imposed some self-restraint. It published its opinion section, The Sunday Review, without a single mention of President Trump. The Times explained “Much of the attention to Trump is warranted, of course. In fact, it’s important. But it does have an unfortunate side effect: It crowds out discussion of other vital topics.”
Credit The Times for taking the first step. When you realize that you’ve gone off on an obsessive compulsive self-blinding tangent, just stopping cold turkey is progress.
However, it remains to be seen whether the media and the Democratic Party led “resistance” will take the necessary next step and consider that Trump’s various policies may have positive elements that should be considered, rather than being dismissed as pure manifestations of evil.
Take the standard narrative news coverage on the stock market. It ascribes the more than 10 percent advance in the market post-election to Trump’s adoption of the so-called standard Republican playbook of tax cuts for the rich, labeling it another example of the much maligned “trickle-down” economics under which, the narrative goes, the middle class and the poor will suffer.
Well, why then, is consumer confidence rising smartly, from 87.2 in October to 97.6 this month, according to the University of Michigan? After all, the middle class and the poor comprise the overwhelming proportion of consumers.
The class warfare narrative doesn’t quite work if both Wall Street and Main Street see a brighter future.
Wall Street trades on future expectations and the consumer confidence index combines both the assessment of current conditions and future expectations. If what Trump is proposing were really so terrible, then, Wall Street should be trending down in fear of Trump screwing things up. Meanwhile, given all the negative Trump reporting, the worries of everyday Americans should be dragging down the confidence index.
In truth, the current market and economic optimism represents a nonpartisan embrace of the possibilities under Trump. It is a variation of the standard buy-on-rumor-sell-on-news phenomenon, under which investors see possibility and potential in the future (rumor), which inevitably exceeds the eventual actuality (news). Investors may well be overestimating what Trump will be able to accomplish. Indeed, the markets and the confidence index may only be granting the president the honeymoon that the “resistance” sought to deny him so churlishly.
Another narrative might be that the market current rally is a “relief rally,” i.e. relief from an unacknowledged consensus view that Hillary Clinton’s policies would have had a relatively depressive economic impact. Maybe investors and everyday Americans prefer the policies espoused by Trump, which generate more jobs overall, to policies that improve the relative job prospects of particular interest groups, or to policies that target preferred industries. Maybe Americans believe that there will be more jobs for everyone, in all businesses, if overall economic growth accelerates. John Kennedy said, “A rising tide lifts all boats.”
The media and the “resistance” should stop and think: if things are so bad, why is everyone so happy?
While the media and the “resistance” jumped on their horses and rode out to fight the new and terrible “rustlers,” the supposed rustlers were back at the ranch trying to help the ranchers tend to their cattle, build new barns and sink new wells.
Red Jahncke is president of Townsend Group International, a business consultancy in Connecticut, and a freelance columnist who writes on public policy issues.
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