The following is presented as part of The Columbian’s Opinion content, which offers a point of view in order to provoke thought and debate of civic issues. Opinions represent the viewpoint of the author. Unsigned editorials represent the consensus opinion of The Columbian’s editorial board, which operates independently of the news department.
On March 11, President Joe Biden gave a White House address touting his administration’s response to the COVID-19 crisis. As it happened, the Dow Jones Industrial Average closed at another record high the day before. But about that Biden said not a word.
Had Donald Trump still been president, the stock market would have almost certainly topped his list of glorious achievements. We’d hear popping talk about how our 401(k)s are sizzling and how he is the reason. Sample tweet from August 2017: “Stock market at an all-time high. That doesn’t just happen!”
No, Biden spoke of “a collective suffering, a collective sacrifice, a year filled with the loss of life and the loss of living for all of us.” He spent a good deal of time on the anguish, but then he moved, happily, to his administration’s successes – boosting production of the Johnson & Johnson vaccine, recruiting armies to give the shots, getting the vaccines into pharmacies.
It was a relief to hear a Democratic president bragging out loud about his accomplishments. But the message must move away from pain to prosperity. Biden has started on that path by touting the massive COVID relief bill that’s sending checks to an overwhelmingly supportive public. His self-praise should expand to the stock market.
Democrats seem especially reluctant to use the stock market as a measure of their economic prowess. Under Barack Obama, the Dow hit record highs 118 times. Do you remember him ever talking about it?
Biden was basically right when he said, “Where I come from in Scranton and Claymont, the people don’t live off of the stock market.”
It’s true that the wealthiest 10 percent of American families own 84 percent of Wall Street portfolios’ value. The bottom 50 percent – that’s half of American families – possess none or almost no equities. Last year, gains in the S&P 500 added an estimated $4 trillion to American portfolios, but $3.4 trillion of it went to the top 10 percent.
Many Americans don’t understand that reality, as Trump knew well. Those in the middle who own a few shares, perhaps in their retirement accounts, do feel tied to movements in stock prices. Never mind that in 2019, the median portfolio size for households in this group was only $13,000.
Noninvestors, meanwhile, often associate a booming stock market with a good economy, even if they themselves are hurting.
It’s odd how Democrats shy away from taking credit for bubbling markets, when, in recent decades, stock returns have done better under their presidents than Republican ones, Trump included. The Dow posted an annualized return of almost 11.8 percent under Trump, according to MarketWatch. That was good but short of Obama’s 12.1 percent. And it was nowhere near Bill Clinton’s 15.9 percent.
As MarketWatch also noted, even Clinton’s numbers were blown away by the 25.5 percent annualized rise under Calvin Coolidge, a Republican. Of course, Coolidge had the Roaring ’20s blowing wind in his economy’s sails.
We’re now in the 2020s. Many economists are predicting that with the virus in retreat, the economy will roar once again. The Financial Times cites such prods as pent-up demand, government spending and savings by the locked-down Americans who kept their jobs but had few places to spend money.
The stock market is off to a hot start in Biden’s first year. We won’t miss tweets like Trump’s “Dow hit a new intraday all-time high! I wonder whether or not the Fake News Media will so report?”
But Democrats would be wise to at least applaud politely when stock markets sing of a new age of abundance now that they’re in charge.
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