That seems to have changed under President Joe Biden.
Remember how former President Donald Trump tied all records to his so-called brilliant as chief economic officer. “The Dow Jones Industrial just closed above 29,000!” he tweeted about six weeks before the 2020 election. “You are so lucky to have me as president. With Joe Hiden ‘it would fall apart.”
Not enough. Ten months after Biden was declared the winner, the Dow Jones Industrial Average was above 34,500. As for the broad S&P 500, that stock index has closed at least 40 all-time highs since Biden was chairman.
Fortunately for Democrats, Biden claimed his bragging rights. Better yet, he trolls Trump with a Trump-like swagger. “The stock market is booming,” sang Biden in a speech honoring the unions. “It’s gone higher under me than anyone.”
In fact, presidents don’t have as much control over the stock market as they might claim. New technologies are influencing economic developments, as are the Black Swan events, such as the September 11, 2001 attacks. Then there was COVID-19.
That said, stocks have certainly done better so far under Biden than under the previous guy. As of the last election in late August, the three major indexes – the Dow, S&P 500 and NASDAQ – had produced higher percentage gains under Biden than during the same period under Trump, according to Forbes.
Stocks have also performed well under President Barack Obama, but you haven’t heard from him on the Dow Jones. And until recently, Biden wasn’t talking about it either.
Democrats had reasons, not all good ones, for their reluctance. While downplaying the gains in stock market wealth, they often note that stock ownership is heavily focused on wealthier Americans.
It’s true. About 92% of stocks owned by Americans reside in the richest 10% of households. We include interests in 401 (k) s and other pension plans, and mutual funds.
Almost half of all Americans do not own a single stock. And among households that do, the median stock value is only $ 40,000.
But these Democrats often underestimate the number of Americans who rejoice in a rise in stock prices that generates gains of a few hundred dollars. And many of those who don’t own stocks associate booming markets with general economic prosperity.
Some Liberals, on the other hand, have this acerbic idea that there is something not quite healthy about making money on the stock market. After the Trump-era tax cuts for wealthy investors, they want to raise taxes for those with very high incomes, and that makes sense.
But then they must also recognize that stock rallies produce more taxable income. And the soft part is that the proposals to increase tax rates on capital gains and very high incomes clearly haven’t reduced Americans’ appetite for investing in stocks.
To complicate the Democrats’ message is that affluent Americans increasingly represent their electoral base. In 2020, 59% of counties with median household income above $ 80,000 opted for Biden, while only 39% favored Trump.
Biden then returned to his party’s previous talking point that the stock market is not the economy. He complained that some people “see the stock market, corporate earnings and executive compensation as the only measure of our economic growth.”
But did Biden use the word “exponentially” to describe the rise in stock prices under his presidency? He certainly did. “I’m glad it has increased,” he added, “no problem.” Good for him, and if this change in tone continues, good for the Democrats.
Froma Harrop is a national columnist whose work appears regularly in the Grand Forks Herald.