With six months under his belt, Trump is halfway through his first year of the most scrutinized and criticized presidential term in history. His controversial Twitter feed has caused many uproars, but if you have been watching closely, opponents are fast running out of legitimate complaints. The economy is performing mostly how Trump promised. ISIS has been beaten back and lost many of the cities it once controlled, and international trade talks are underway. Things are on a good track, but if we really want to measure Trump’s progress, we should take a detailed look at the economy. More specifically, we can analyze stock market trends to learn important things about the modern presidency.
The Rally
It’s no secret that stocks have soared since Trump was elected. There was a brief plateau in March and April, but growth has resumed and sustained. In his first six months, Trump has overseen S&P 500 growth at 8 percent, Dow growth at over 8 percent and Nasdaq growth of 14 percent. These numbers compete with annual gains during Obama’s reign and are among the best seen since the recession.
More importantly, the bull market isn’t riding on the tails of a few industries or companies. Roughly 70 percent of S&P 500 companies are up so far this year. Additionally, banks and oil have stabilized considerably from the start of the year. In other words, the stock market is as healthy as it has ever been, and it is proving an unprecedented resilience against political turmoil.
The Effects of Regulation
Many economists attribute the bull market to investor confidence. Trump’s vocal pro-business stance should mean good things for the economy in general, and investors have supported that stance with their money. While that’s a fair assessment of the early gains (especially those seen right after Trump won but before he was sworn in), the sustained growth is a product of more than simple good will. Many will say that Trump has accomplished very little in his first 100 days, but that’s not a realistic assessment. He may have fallen short of his initial ambitious time scale, but he’s had an extremely productive start. Most of this productivity comes in terms of executive orders and deregulation.
While major changes that require Congressional cooperation are slow, Trump has used unilateral power to change more than a dozen small regulatory problems that were hurting business. Individually small, the culmination of deregulation so far has freed up many millions of dollars in industries that include banking, federal hiring and contracts, education, healthcare and energy. It’s important to note that these regulatory changes have had little impact on how any of these industries operate. The rollbacks have just alleviated some of the financial burden tied to the regulations.
Comparing Trump and Obama
Talking about deregulation and executive orders brings us to yet another inevitable comparison between Trump and Obama. Let’s start with stocks. Obama inherited the country right after the stock market crash that heralded the Great Recession. Despite that, his first month in office was during a moment of stability and growth in the markets. They had pretty much hit rock bottom and could only go up. That didn’t stop him from overseeing an additional 20 percent drop in major indices. In fact, if we compare the first six months of both presidents, we find that markets favored Trump by about 3 percent.
We’ve already seen how regulation can impact markets. Obama aggressively pursued harsh financial regulation and environmentalism that was extreme to the detriment of the economy. The markets responded, and only historically low interest rates enabled even the sluggish recovery that was seen during his tenure. Trump has already had more interest rate raises in six months than Obama saw in four years. The markets still favor Trump, and that is because he has successfully overturned almost 30 executive orders that were put in place by Obama.
Critics complain that Trump has used executive orders more than Obama did, but that is only because he has been systematically dismantling Obama’s abuses of power. In total, Trump is on track to double Obama’s average number of orders in a year. If you subtract orders that are just overturning Obama policy, then Trump has used less unilateral power than any president in recent history. No matter how you try to measure it, he has been more productive, more diplomatic and more democratic than any other modern president.
~ American Liberty Report
