Trump is Great for Business, Until He Isn’t

Wall Street has been excited about the deregulation or something.  Those of us who expected a sell off after his election in reaction to that old bugaboo “uncertainty” (that they constantly asserted during the completely certain Obama years) had to adjust our expectation as the sell off became a buy in and has continued.  Yes, that cry of uncertainty was full of alligator tears, and these Wall Street poobahs are creaming their pants over all of their people in Trump’s cabinet.  We’re living in times of real uncertainty now with a completely over their heads administration but no matter – deregulation, bitches!

So yeah, markets have embraced that old irrational exuberance, emphasis on the irrational, until the deregulation kicks in and the old bad habits come back leading to the usual over leveraging, over confidence, hubris and arrogance that bites them, and the rest of us, in the ass.

In the meantime Daniel Gross in Slate notes how business leaders are recognizing that having one of their own (if they consider themselves incompetent) in the WH isn’t exactly going to be good for them.  Like a lot of other Trump voters, they’ve figured out that he just might do everything he promised – taking him literally instead of figuratively would have been smarter.

We don’t yet know the effect of Trump’s policies on macroeconomic growth. But a mere four weeks into the Trump administration, we have already seen several examples of how Trump’s policies and modus operandi are actually proving to be bad for specific businesses in a very concrete way.

Executives in the travel/tourism and leisure business have been seriously hit by the chaos of his Muslim ban, and the backlash against Trump in general has kept people away from America.  I can tell you (anecdotally, of course) that Times Square is more navigable on foot than usual these days.  New York is getting the double whammy of having to put out for defending Trump Tower while tourist revenue is likely down.  Trump’s buddies in the home-building and construction industries and the mortgage/lending business are seeing interest rates rise (in anticipation of tax cuts), which will affect those perpetually low mortgage rates of the last 8 years, and will slow down home buying and building.  Home starts are flat.

Like his businesses, and his daughters’ which are suffering from backlash, there will be consequences to the election of someone who has swallowed whole the false narrative that Republicans and Republican ideas are better for business.  Reality is the opposite and like in most things, politics, business, romance, whatever – being detached from reality is probably not a good way to proceed.

This Manichean view of the relationship between political parties and the performance of the stock markets and the economy is, of course, wrong. For much of the last century, the stock market has done better under Democrats than under Republicans. The worst events for the market—the crash of 1929, the crash of 1987, the financial crisis of 2008—all came on the heels of eight years of Republican rule. There have been four recessions in the last 36 years. Each started when Republicans were in the White House.

Democrats should sing this tune more often.





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