Ben Rhodes's stock whopper
Creative-writing major Ben Rhodes is busy analyzing the stock market these days, roundly advising us with his usual echo-chamber "narrative" that President Obama deserves credit for the soaring share market.
Here are the former Obama "mind meld," spin doctor, and deputy national security adviser's pearls of wisdom:
Yes that does just happen when you follow Barack Obama as President and inherit eight years of his efforts https://t.co/rilBzTXZgj
— Ben Rhodes (@brhodes) August 3, 2017
Enjoy the Obama economy while you have it. https://t.co/ygFC1IyBiu
— Ben Rhodes (@brhodes) July 31, 2017
Would you buy a used stock from this particular market guru?
I don't think even a Democrat would, at least not with his own money.
The narrative Rhodes is trying to spin is that Obama, not President Trump, is responsible for the soaring market gains in the last six months. It doesn't matter that the market was anemic for the eight years of Obama's term. It doesn't matter that GDP came in every time at 2.6% or lower, and it was mostly lower. It doesn't matter that Obama saddled the economy with a blizzard of regulations and belittled business as "you didn't build that." Nor does it matter that Obama trashed longstanding bond-market protocol by bailing out GM's unions over its priority investors, insanely delayed the U.S.-Colombia free trade pact five long years, and spent so profligately that his actions resulted in rating agencies cutting America's credit score below the top tier for the first time ever. He also threw Dodd-Frank, Obamacare, the EPA nightmare, the Paris climate accord, and a tripling of the national debt to pay for his bureaucrat bailouts and welfare programs onto the economy, nearly suffocating it.
Now, just as Team Obama claimed credit for the fracking revolution after trying to shut it down, Ben Rhodes is claiming credit for the stock market boom, which just happens to coincide with rising business confidence and the quiet revolution to restore the U.S. economy, which took off immediately after Trump was elected president. Just this morning, employment showed impressive gains as businesses take on the risk of hiring again, something they do only when they feel confidence. And prime-age employment, a key indicator of labor force participation, has hit an eight-year-high, once again on Trump's watch (h/t Instapundit).
What Rhodes fails to understand is that markets are forward-looking. They don't care what happened six months ago; they care about the here and now and the days to come. An investor buys a stock based on how he thinks the stock is going to behave. He wants to know if it has a product the public wants and whether that public is going to be in sufficiently good shape to buy it. The stock rises on demand for it, and that demand is fueled by expectations of good conditions for growth or expectations for bad conditions for losses. The most concrete indicator of that is profits. Investor's Business Daily has a flawless editorial describing how this dynamic works.
President Trump, who knows a thing about operating in the private sector, understands this dynamic well, pointing out in his tweets that the stock market was only 18,000 six months ago when Obama was president and is now 22,000, for a rise of more than 20% in just that short period of time.
"Corporations have NEVER made as much money as they are making now." Thank you Stuart Varney @foxandfriends Jobs are starting to roar,watch!
— Donald J. Trump (@realDonaldTrump) August 1, 2017
And he pointed out that it was hardly random:
Business is looking better than ever with business enthusiasm at record levels. Stock Market at an all-time high. That doesn't just happen!
All the same, as IBD notes, multiple factors, not all of them political, go into how the market behaves, and the market could change direction any time. If it goes south, will Rhodes heap credit onto President Obama for that, too? We all know the answer to that one.
Rhodes and Obama spent eight years blaming President Bush for all the bad economic news seen in the Obama economy. Now he plans to take credit for all the good news seen in the Trump economy. Somehow, it seems that Rhodes is trying to have it both ways.
Clear enough now why no one should take stock advice from creative writing majors?