When Donald Trump and Hillary Clinton were squaring off for the presidential election, mainstream media outlets told us that a Trump win would “tank the markets.” Oh yes, Wall Street was set up “for a major crash.” Hundreds of millions and possibly even billions of dollars would be lost.
On 21 October 2016, for example, Politico published a report quoting several economists who were sure — sure! — that Trump would singlehandedly destroy the stock market. Dartmouth College’s Eric Zitzewitz explained: “Wall Street clearly prefers a Clinton win certainly from the prospective of equity prices,” he said. “You saw Clinton win the first debate and her odds jumped and stocks moved right along with it. Should Trump somehow manage to win you could see major Brexit-style selling.”
Oh yes, Politico went on to say, according to a report by economists, “the stock market [would be] worth 11 percent more under a Clinton presidency than a Trump presidency.”
What’s more, “the Trump effect” would supposedly be global. “All told, these movements suggest that financial markets expect a generally healthier domestic and international economy under a President Clinton than under a President Trump,” Zitzewitz and University of Michigan’s Justin Wolfers wrote in the paper cited by Politico.
In other words, there would be hell to pay if Trump won. The American economy and stock markets would crash, and they would soon be joined by global stock markets.
Just days before the election, the New York Times published an article stating that “conventional wisdom is that, right off the bat, the stock market would fall precipitously.” Oh yes, a Trump victory would “cause the stock market to crash and plunge the world into recession.”
That same newspaper’s columnist, Paul Krugman, informed us the day after Trump’s victory that “we are very probably looking at a global recession, with no end in sight. I suppose we could get lucky somehow. But on economics, as on everything else, a terrible thing has just happened.”
Well, shockingly, all those predictions were completely and utterly wrong:
Global stock markets have been on a torrid run in 2019, adding more than $17 trillion in total value, according to Deutsche Bank calculations.
The value of global equities began the year just under $70 trillion but has now surpassed $85 trillion, according to a chart from Deutsche Bank’s Torsten Slok.
This amazing climb has been “largely dominated by the U.S. markets.” The S&P 500, Dow Jones Industrial Average, and Russell 2000 have all risen more than 20 percent this year. And we’re not only talking about this year. Since Trump’s election, the Dow Jones has risen a stunning 10,000 points.
That is what the Trump Effect is truly all about. What’s more, from the looks of it, 2020 promises to be just as good a year as 2019 — and it’s all because of Donald Trump’s smart economic policies.