Immediately after the election, arch-leftist Paul Krugman offered one of his worst predictions ever:
It really does now look like President Donald J. Trump, and markets are plunging. When might we expect them to recover?
Frankly, I find it hard to care much, even though this is my specialty. The disaster for America and the world has so many aspects that the economic ramifications are way down my list of things to fear.
Still, I guess people want an answer: If the question is when markets will recover, a first-pass answer is never.
Heh. Trump’s election sent the markets upward. The S&P stood at 2,129.92 on election day, and closed at 2,268.88 today. Of course, the stock market rises and falls for reasons that have nothing to do with politics. But liberals’ claims that Trump’s election has nothing to do with the rising market are refuted rather decisively by today’s news that consumer sentiment has reached a 12-year high:
A measure of consumers’ attitudes rose to its highest level since January 2004.
The Index of Consumer Sentiment hit 98.2 in December, the University of Michigan reported on Friday. The figure is up from 93.8 in November’s final reading.
The surge in confidence following President-elect Donald Trump’s surprise election aided in the numbers, the report said.
[Richard Curtin, the Surveys of Consumers chief economist] said 18 percent of consumers mentioned the expected favorable impact of Trump’s policies on the economy. That’s twice as high as the prior peak of 9 percent in 1981 when Ronald Reagan took office, he added.
No one knows what the future holds for the stock market, but the spike in consumer confidence is significant in a couple of respects.
First, the press tried to hype the anemic recovery of the Obama years, but the public knows better. The U.S. economy has been stagnant for years, and many people expect different policies to bring better results, while hardly anyone (other than Paul Krugman) expects the opposite.
Second, it is remarkable how little impact the press’s war against Donald Trump has had. Reporters and editors have told us relentlessly that Trump is as dumb as Ronald Reagan and as evil as Richard Nixon, but people aren’t buying it any more today than they did on November 8. Less so, in fact.
Meanwhile, liberals are already changing their tune to adjust to circumstances. Left-wing economist Robert Shiller preemptively likens Trump to Calvin Coolidge:
The stock rally since Donald Trump won the presidency can only be explained by psychology — an overwhelming sense of excitement about the prospects for growth — not efficient markets, Nobel Prize–winning economist Robert Shiller told CNBC on Wednesday.
The Yale University professor warned against getting too comfortable thinking the good times won’t end.
“It could be like … Coolidge prosperity. It went for a while and it ended badly,” he said, referring to the presidency of Calvin Coolidge who presided over the Roaring 1920s before the decade-long Great Depression that started in 1929.
Blaming the Depression on Coolidge is moronic, but I have always wondered why liberal economists, to be consistent, don’t blame the dot.com collapse and ensuing recession on Bill Clinton, thereby negating the supposed economic achievements of his administration. That would make a lot more sense, actually. Not everyone remembers–most would prefer to forget–that the NASDAQ dropped from 5047 to 1114, a 78% decline, between March 2000 and October 2002. This was the mess that greeted George W. Bush when he took office. Funny how the press never uses that disaster to negate the achievements–which in a few respects were real–of the Clinton administration.