I often argue that presidents are responsible for about 3% of outcomes, and also that most people overrate the importance of presidents. (Perhaps this is a trait that evolved in pre-historic times, when tribal leaders were relatively more important.)
We don’t know the final outcome of the election, but the stock market seems to be reacting based on the most likely outcome, Biden plus a GOP senate. Why the big increase? Wasn’t Trump good for the stock market? Should Trump feel bad that investors seem to be celebrating his (likely) defeat?
I do think that a few of Trump’s initiatives helped stocks–mostly the corporate tax cuts. But of course the tax bill was mostly created by Congress; Trump merely signed the legislation. After that, Trump did little to help stocks, and his trade war reduced stock prices. The market knows this, and knows that McConnell will prevent a repeal of the corporate tax cut.
I think you could argue that both voters and investors are slightly more favorable toward the GOP than toward Trump. GOP Congressional candidates seem to be running 1.2% ahead of Trump, on average. That’s not a lot, but of course it’s a huge sample and thus “statistically significant”. And most people are basically party line voters.
Trump is such a polarizing figure that people (on both sides) have tended to think of politics in terms of Trump. But if you take a closer look it seems like voters and especially investors see things a bit differently. They wish to discard Trump’s trade/immigration policies, but not his conservative economics.
The stock market soared under Obama. I don’t think many conservatives attribute that to Obama, nor do I. Stocks also soared under Trump. But why not call the 2017-20 stock rally the “Mitch McConnell rally”. That may not be accurate either (perhaps he deserves 3% credit), but it’s no worse than calling it a “Trump rally”.
PS. If you say stocks are not rallying on Trump’s defeat, rather it’s the gridlock in Congress, I agree. That’s my point; Trump himself is not all that important.
PPS. Is this the first election where both sides seem disappointed? Trumpistas love Trump more than his policies, and Dems like Biden’s policies more than Biden. Trumpistas are (likely) losing Trump, and Dems are losing their chance at enacting their policies.
Only investors seem happy. Cold, inhuman, robotic investors, with no heart, no human feelings.
Neoliberalism is like a monster that cannot be destroyed.
PPPS. I just saw that Nevada seems to be going for Biden. According to Fox News and AP that means Biden has won. But I’m still not convinced on Arizona; indeed I’ve never believed that call. On the other hand, he seems to have a good chance in PA and GA. So he’s got three paths.
But what if Trump somehow won? How would stocks react?