“The sky didn’t fall, but I hope it does soon!”
In a 2020 presidential debate, President Donald Trump predicted that if Joe Biden were to win that election, the stock market would tank. Biden replied that the stock market has little influence on the life of most working Americans. That response should have resonated with the Trump/MAGA crowd, most of whom are undereducated blue-collar workers who have never invested in the stock market. But logic is lost on most of the true Trump believers; all that matters to them is whatever their new messiah proclaims.
The Biden Boom
Biden could have added to his debate reply his assurance that the stock market would not crash. Three years into his presidency, the stock market is flourishing. According to CBS News,
Investors have plenty to cheer as 2023 draws to a close, with the S&P 500 ending the year with a gain of more than 24% and the Dow finishing near a record high. Easing inflation, a resilient economy and the prospect of lower interest rates buoyed investors, particularly in the last two months of the year.
The Dow Jones Industrial Average hit a high point just as Trump’s presidency ended—rising by 57 percent during the Trump years—and then tanked. (Should Biden be blamed for a decline before he enacted any economic policies?) But shortly after Biden’s inauguration, the market began to rebound. Within a year, the Dow surpassed its highest point during the Trump years. As of the date of this writing, January 13, 2024, the Dow was at 37,952.98. That number crushes the highest point during the Trump years.
Trump instead wished for a stock market crash, which, he hopes, will aid his campaign to return to the White House.
The Trump Gloom
But rather than congratulating his rich friends for their investment profits in recent years, Trump instead wished for a stock market crash, which, he hopes, will aid his campaign to return to the White House. Trump’s starstruck disciples should deduce that if a booming stock market somehow trickles down and benefits them, then a stock market crash would similarly trickle down and harm them. But logical deductions are not likely to be found among the MAGA faithful.
According to the Economics Help website, “Most people who do not own shares will be largely unaffected by short-term movements in the stock market.” But a case can be made that stock market declines are more likely to affect working-class Americans than are stock market gains. The above-cited Economics Helps Website article adds this note about how short-term thinking can cause market declines and then harm workers:
It could be argued workers and consumers can be adversely affected by the short-termism that the stock market encourages. Shareholders usually want bigger dividends. Therefore, firms listed on the stock market can feel under pressure to increase short-term profits. This can lead to cost-cutting which affects workers (e.g. zero contract hours), or the firm may be more tempted to engage in collusive practices which push up prices for consumers.
Boom for Some, Gloom for Others
So, if Trump’s wish for a pre-election stock market crash were to come true, the results could paint a gloomy picture for working-class Americans—who make up the MAGA base—as well as for the wealthy who have disposable income to invest in the market. However, under a Trump presidency, wealthy Americans who might be hit hard by a stock market crash would have their gloomy days brightened by a big tax cut—one crafted specifically for them.
But those working-class MAGA disciples—who likely would suffer from the tickle-down effects of a stock market crash—are too busy attending worshipful rallies and defending their new messiah to think through the implications of the messiah’s wishes (for a stock market crash) and promises (for tax cuts that will enrich the already wealthy at their expense).
No one should wonder why Donald Trump proudly proclaimed his love for the poorly educated.
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