Stock market growth has always been a key indicator of the economy in the United States, as a result, it is looked at when judging a president's "success" in office. What I've come to realize is that yes presidential policies and actions do affect the stock market, but there are many others determinants, and sometimes its out of their control. Presidents Trump and Clinton both inherited favorable conditions in office. Clinton was fortunate to be in office during the dot com boom, during this time the S&P grew 210%. Trump also received a post-recession growing economy when he was inaugurated, and his infamous tax cuts fueled the market even further. Recently, however, his trade war with China has slowed stock market growth, and has made it a choppy ride. Reagan and Obama experienced different situations when they came into office. Reagan had to deal with the recession of 1981, while Obama came into office during the worst economic crisis since the Great Depression. They both managed to stimulate the economy but with different ways. Reagan cut taxes on the rich, which was called the trickle down affect. Obama on the other hand increased taxes on the rich, but pumped a ton of federal money into the system, leaving office with the S&P tripled from the time he took office in 2008.
https://www.cnn.com/interactive/2019/business/stock-market-by-president/index.html
It is interesting to see the comparison of market growth under different modern U.S. Presidents. The trade war President Trump is having with China may not be the best situation in the short-term, however, it is predicted that long-term affects could be significant in the performance of our economy. We could have much better trade deals and more diversity within our market which would impact the world economy, not just ours. It will be important to follow the impact of this 'war' to see how things will be altered.
ReplyDeleteI wonder if President Trump considered the potential impact on the market when imposing tariffs on Chinese trade. If so, I suppose he believes that the potential long term benefits he is seeking from these trade regulations will pay off.
ReplyDeleteAfter reading the article, it is interesting to see how different presidents with drastically different economic approaches were able to turn the economy around. Both Raegan and Obama were able to have great success in stock market growth with almost opposite policies.
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