The Dow Jones Industrial Average closed above 38,000 for the first time on Monday, setting a record high after a steady rise over the last week. The S&P500 also reached a record high, closing at around 4,850.
The surge is being driven in large part by optimism about the prospects for a “soft landing,” in which inflation comes down to normal levels while the economy avoids a recession.
Investors are also expecting interest rate cuts at the Federal Reserve as soon as March, lowering borrowing costs for consumers and businesses, potentially triggering a burst of economic activity.
Of course Trump takes credit, saying the economy is horrible, but polls something-something.
Cue the Q-Anon music.
Meanwhile, Jamie Dimon – chair and CEO of JPMorgan Chase, the largest and most profitable bank in the United States, and one of the most influential CEOs in the world – heaped praise on Donald Trump’s policies while president.
“Take a step back, be honest,” Dimon said. Trump “was kind of right about Nato, kind of right on immigration. He grew the economy quite well. Tax reform worked. He was right about some of China. He wasn’t wrong about some of these critical issues.”
As Robert Reich pointed out in The Guardian:
- Trump’s economy lost 2.9m jobs. Even before the pandemic, job growth was slower than it has been under Biden. The unemployment rate increased by 1.6 percentage points to 6.3%. The international trade deficit that Trump promised to reduce went up. The US trade deficit in goods and services in 2020 was the highest since 2008 and increased 40.5% from 2016. The number of Americans lacking health insurance rose by 3 million. The federal debt held by the public went up, from $14.4tn to $21.6tn.
- Trump’s tax cuts have added $10tn to the debt since their enactment and are responsible for 57% of the increase in the debt ratio since 2001, and more than 90% of the increase in the debt ratio if the one-time costs of bills responding to Covid-19 and the Great Recession are excluded. Eventually, the tax cuts are projected to grow to more than 100% of the increase.
