(05-31-2024, 02:17 PM)Jaguarmeister Wrote:

(05-31-2024, 12:48 PM)mikesez Wrote: Presidents have little effect on the real-time economy.  It does not make sense to judge a President based on economic performance during their term, even if they invite you to do so.

Disagree.  The stock market returns and its whims might fit the above narrative, but the actual economy can be influenced and often is, sometimes significantly so, by federal, state or local policy.  If a politician can point to economic results that are tied to a specific policy, they'd be right to do so and foolish not to.  And we'd be foolish to brush it aside as "well he/she doesn't really have any control over the results".

The stock market is often a leading indicator of economic activity.  However, last year, the Magnificent 7 tech stocks pretty much carried the markets, whereas if you excluded their returns from the indices you would have gotten a much different picture of the stock market, one that more closely matched prevailing sentiment on the economy.  This year may not be to the same extent as last year with Tesla down almost 30% YTD as I type, but an equal weight Magnificent 7 is still up over 24% YTD with Nvidia more than doubling in the past 5 months.  That doesn't match my view of what's going on with the economy.  The Nasdaq itself, which is not an equal weighted index but includes the Magnificent 7, is up 11% YTD.  The equal weighted Nasdaq 100, which includes the Magnificent 7, is up only around 2.5% YTD.   For those that follow what I'm saying, you can see the impact 7 stocks are having on the "market" returns.  I'm sure you'd see something similar on the S&P returns and perhaps I'll take a look at that when I have a few more moments. 

Presidents don't generally have policies targeting one or a handful of companies to be able to claim anything about their individual stock performance(s), but Presidential economic policies absolutely produce economic results during their terms and sometimes beyond.

Yes, there are specific cases where a specific policy change can be connected to good economic results, but most changes in the economy are driven by things that Presidents and members of Congress don't even think about.

I completely agree that the economy is not as good today as the stock market suggests it is. And low unemployment is good, but it doesn't mean much when real wages are slowly shrinking. Biden has to insist the economy is great, but (to my point) he shouldn't have to, and (to your point) it ain't.

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