From Robert Stacey Stacy McCain:
Posted on | December 5, 2016 |
In the weeks leading up to the Nov. 8 election, Democrats and the media (but I repeat myself) warned of economic disaster if Donald Trump won.
“Economists: A Trump win would tank the markets,” was the Oct. 21 headline at Politico, and on Nov. 6 — two days before the election, when some polls showed Hillary Clinton’s numbers had sagged — the headline at Huffington Post was, “Donald Trump Has Caused A Historic Drop In The Stock Market,” with writer Ben Walsh warning:
Deporting some 11 million undocumented immigrants, building a wall along the border with America’s third biggest trading partner, starting a trade war with Mexico and China that would destroy 4 million U.S. jobs: These are all deeply harmful economic policies.
Moody’s says Trump’s policies would throw the U.S. economy into the longest recession since the Great Depression. Citigroup thinks a Trump win could cause a global depression. By a different measure, Trump in the White House would cause the American economy to shrink by $1 trillion over five years, according to British research firm Oxford Economics.
As Democrat campaign propaganda, this may have been effective, but as financial journalism, it has proven woefully incorrect. The day after Trump’s stunning victory, the Dow gained more than 250 points, and by Nov. 22, hit a record high above 19,000 points. This “Trump boom” shows no sign of fading. The Dow jumped 100 points after the opening bell this morning and, as of 11 a.m., was at 19,260. And yet the media are still looking for gloom amid the economic sunshine:
“It’s hard to know how President-elect Trump will be in 54 days or 53 days when he is President Trump,” Joann Weiner, director of the department of economics at George Washington University, told Circa.
“I think the biggest worry for anyone getting out of college is, ‘Will these policies tip the economy into a recession?’”
What liberals don’t seem to understand . . . Well, they don’t really understand anything very well, but they especially don’t understand economics, having paid little if any attention to the subject, except to seek justification for their crypto-Marxist antipathy to profit.
There’s more at the link.
— Dana Pico (@Dana_TFSJ) December 5, 2016
I will admit to not having been too kind to the professional economists of late. This was Heather Long’s1 tweet the day before the latest unemployment numbers were released:
The November jobs report comes out at 8:30am ET on Friday. @CNNMoney survey predicts: +181,000 jobs added and 4.9% unemployment (no change)
— Heather Long (@byHeatherLong) December 1, 2016
So, what happened?
In other words, the professional economists got the number of new jobs added very close to correct (178,000 vis a vis 181,000 predicted), but they totally missed on the U-3 unemployment number,2 because they never saw that so many people, 226,000, would drop out of the workforce.
— Heather Long (@byHeatherLong) December 2, 2016
Eventually, there will be another recession, and if historical numbers are any indication, it will happen sometime during Donald Trump’s initial term, which I stated would be the case regardless of whom won the election.3 The recession will be blamed on the President, as recessions always are, but at least for right now, the predictions of the learned economists are all being proved wrong.
- I’m not picking on Miss Long, who is a reporter, not an economist. I tend to reference her a lot because we follow each other on Twitter, and she is pretty fair about presenting economic and business news, without much apparent bias. No one can read all of the news; by following just a few economics reporters, I can get good leads without having too much of a cacophony roaring in my ears. ↩
- I have stated previously that I pay attention to the U-6 unemployment numbers over U-3, and that U-6 is a better indicator. ↩
- Recessions happen when economic optimism leads to excess productive capacity, as businessmen make estimates on future growth and markets, and get it wrong. It is a pet theory of mine, one which I have not yet worked out with statistics, that the continued slow-growth of the economy since the last recession is having the effect of delaying the next recession. ↩