What a week it’s been for Americans invested in the stock market. Last week the Dow Jones traveled more than 22,000 points over just the course of a week, resulting in price volatility we haven’t seen in years and suddenly shaking everyone out of the laid-back seemingly ‘growth-without-end’ environment we’ve been accustomed to recently.
The complex and multifaceted economics aside, it is also worth noting how the market’s turmoil naturally soon became a part of the daily tornado in our national political discourse as well.
The rising stock market, which has soared since election day, has been one of President Trump’s most touted talking points amid the other positive macroeconomic trends in employment, consumer optimism, and growth.
It is indeed true that over this past year, pro-growth regulatory and legislative policies coming from D.C. have created a more nimble environment for businesses, whether large or small, to operate in, and contributed to increased business profitability and thus stock gains.
Despite this week’s volatility, the fundamentals point to more positive indicators on the horizon, with economic growth looking optimistic and companies continuing to drive jobs and innovation in this environment, such as with Apple’s recent announcement that it would be investing over $350 billion in the United States over the next five-years.
This seemingly endless parade of positive economic news came to a brief halt last week as the floor suddenly fell out from markets. Many on the left quickly took this opportunity to mock the President and Congressional Republicans for this turn of events, with the President himself even taking to Twitter to denounce the seeming irrationality of the stock market’s sudden decline.
While the debate over the stock market has been a persistent knot throughout the first year of Trump’s Presidency, with many critics saying that much of the market’s current momentum is attributable to President Obama’s work, this week’s sudden turn of events sheds light on the complex relationship between politics and economics.
Year after year, polls repeatedly show that the economy ranks in as either the top or second most important issue Americans are concerned about. As James Carville famously said as a strategist for then-candidate Bill Clinton in 1992, “It’s the economy, stupid!”
It is therefore natural for politicians to claim credit for positive economic developments and to try to shift the blame when the trends are negative. We see this time and time again, whether in the years of pointing fingers after the financial crisis, the attribution battles over the 1990’s tech boom, or in the ever-present yet difficult-to-prove assertions that growth could have been faster or slower under a different set of policies.
The facts usually are far more complicated than the simple “before and after” comparisons that are the standard boilerplate in political ads and flyers. The economy is driven by a multitude of factors ranging from credit and monetary leverage to legal frameworks to changing consumer tastes and tolerances, and even the most hardened and well-compensated mega-fund quants and their algorithms have a tough time predicting developments.
Zooming in a little bit, we quickly see that behind each numerical movement in economic growth are the countless innovators, investors, workers, analysts, and many more who are the ones actually creating the activity that in aggregate results in a move in GDP, job numbers, or company earnings.
That is not to say that our government, and the leaders inhabiting its offices, do not have an enormous role on our economy’s direction. Policies and regulations essentially create the playing field that all of these actors operate in and can very easily accelerate, create, slow down, block, or reverse growth and innovation.
No one knows for certain how the market or economy will develop, even if current projections remain bright. What does remain certain however is that we can always continue to expect, as we saw this past week with Trump and his opponents, economic developments to be rightly or wrongly used as political fodder.
On Sunday night in a chilly Minneapolis stadium where the temperature was reported at 0 °F with a wind chill of -14 °F, the upstart Eagles, who had never won a Super Bowl until then, and five-time Super Bowl champions faced off in Super Bowl LII. It was a thrilling game that had a jaw-clenching conclusion as the Eagles won against the Patriots 41-33.
All across America, an estimated over 111 million Americans tuned in to the game as billions of dollars were spent on chicken wings, pizza, chips, and drinks. An estimated 1.35 billion chicken wings were consumed, with the average American spending just over $80 on Super Bowl consumables and events.
Yet this year’s Super Bowl took place amid a big star-spangled elephant in the room. A matchup between the underdog Eagles and long-time champion Patriots would normally bring lots of heated passions, but of the fan interest sort rather than political or cultural.
With the controversy over standing for the national anthem at games still marring the sport, this year’s Super Bowl was met in the lead up by political division that has caused incredible and emotional polarization in one of America’s most entrenched and previously unifying national pastimes.
While controversies such as Deflategate and the CTE crisis have emerged sporadically in the NFL over the years, it was really in fall last year that NFL players kneeling in response to the anthem and flag that it began to take off in a more political and cultural direction.
Then-San Francisco 49’ers quarterback Colin Kaepernick began kneeling, rather than sitting as he previously had, for the national anthem in the fall of 2016, yet it took a year for the protests to really spread among other players and teams.
And when it did finally spread, we saw how a sport that had long been characterized by tribal opposition take a political tone, as each team suddenly found itself having to decide its policy on kneeling. Many fans demanded that their teams kneel, while others threatened boycotts and abandoning even long-beloved teams over kneeling.
Some teams even split, such as when Pittsburgh Steelers player and U.S. Army veteran Alejandro Villanueva came out to stand for the anthem while the other players decided to try to avoid controversy by remaining in the locker room. It is worth noting that in later games the entire team stood for the anthem.
Eventually in early October it seemed as if the kneeling controversy would be put to an end when NFL Commissioner Roger Goodell sent a letter to NFL team owners saying that they wanted the players to stand for the anthem. Yet by then Pandora’s Box already had been opened and the kneeling protests have continued sporadically since.
The NFL controversies have been complex, as on one hand undoubtedly almost all Americans wish to address systematic abuses and inequities that face some of us. However on the other hand, to disrespect the national anthem and turn a unifying sport like football into a political battleground adds to our national division at a time when we already are at dangerous levels of polarization.
Perhaps the best way will be for Democrats and Republicans to come together to seriously examine and ensure that our criminal justice system is truly protecting the liberty of all Americans properly. Indeed there is hope on the horizon in this regard.
As one example, In October last year Senator Mike Lee (R-UT) and Senate Judiciary Chair Chuck Grassley (R-IA) brought together a diverse bipartisan coalition in the Senate to present the “Sentencing Reform and Corrections Act of 2017.”
The act, which unfortunately has not moved anywhere in the legislative process this session, would revise perceived inequities in criminal sentencing for for non-violent drug offenders, promote rehabilitation for low-risk convicts, and create a national commission to make a serious comprehensive examination of our nation’s criminal justice system.
The issues surrounding law enforcement and criminal justice are extraordinary complex and can be deeply polarizing, but it is worth remembering that the overwhelming of Americans want an equitable and just system that protects our freedoms while also punishing criminals and securing our communities.
And so while millions of Americans still enjoyed Super Bowl LII despite the controversies of the past year, it is worth hoping that we can someday again enjoy a great sport like football without such heated political controversies as well as ensuring that “liberty and justice” for all is truly the case in our country.