I’ve Got Good News and I’ve Got Bad News

© 2017 Steve Feinstein. All rights reserved.

There are lots of important stories in the news every day, but the truly fascinating thing is way that they’re covered and the positive/negative spin that’s assigned to the major political groups.

Economic news is certainly a significant political football. The party out of power generally hates it when things are going well in the economy. If the economy is good, there is a far greater likelihood that people have a job and are providing for their family or themselves. Pocketbook issues are by far the most important to the average voter; everything besides a job is merely a theoretical intellectual indulgence. If you’re paying your rent, buying clothes and food, making car payments, sending the kids to college and perhaps even saving a little for retirement, then all is right with the world. Only when those boxes are checked do people enjoy the luxury of worrying about things like global warming, gay/trans rights, Supreme Court rulings and whether or not we use military force to settle a conflict in some overseas backwater.

Economic activity—whether it’s consumer spending by individuals or investment/capital outlays by major corporations—depends in large part on their perceptions and expectations of current and future economic conditions. If entities have reason to believe that economic conditions are solid and stable (and likely to stay good for the foreseeable future), then they spend and invest with confidence. Retail activity is high. Investment in equipment and systems increases. Home and car buying is strong. Factories are busy. Employment is high. It’s a matter of perception and expectations.

Given the political importance of the economy, it’s little wonder that political combatants have such a strong vested interest in portraying the economy—good or bad—to their electoral benefit. All the participants play their role: the politicians themselves will criticize or praise cherry-picked aspects of the economy to their liking. Their media allies will support or oppose those positions as expected.

There is a story—urban legend, its verity unprovable at this point in retrospect—from around 2006. A cable TV reporter was interviewing a Democratic operative (perhaps James Carville) about the upcoming Christmas shopping season. The reporter said, “Wouldn’t it be great for the country if we had strong holiday sales this year?”

To which Carville replied in his distinctive Southern drawl, “I don’t cay-ahh what’s good for the country! I cay-ahh what’s good for the Democratic Party!” Whether or not it was specifically Carville in exactly 2006 is unimportant. The sentiment is unerringly accurate.

This brings us to a major aspect of today’s economy and how the media and competing politicians react to it: the stock market.

Competing political interests—which includes the media— will either extol or berate the markets’ performance, depending on how it serves their political purposes. When the markets weaken, the out-of-power party is very quick to point out the loss of wealth in the average person’s retirement account or the potential default on a life-long city worker’s pension and claim that the party holding office doesn’t care about the “little guy.” When the markets are strong, to the political benefit of the party in power, the opposition tends to either dismiss it as a fluke or, more often, they don’t talk about it at all.

Such is certainly the case now. It’s quite normal and expected that Democratic politicians don’t talk about the stock markets’ excellent performance, since that would redound to the Republicans’ benefit. But the mainstream liberal media are irresponsibly silent on the matter, since the economy—which includes the markets—is a topic that occupies the most important spot in the minds of the average voter. “Irresponsibly” silent, but not “unintentionally” silent. The liberal media’s silence on the stock market is very intentional.

In January 2012 the DJIA was 12,720 and the S&P500 (a broader index of the entire market) was 1315. When Donald Trump took office in January 2017, those figures were 19,827 and 2271 respectively. Today (Dec 4, 2017), they are 24,290 and 2639, an average increase of 92% since January 2012. Incredibly impressive—nearly double in less than six years. Granted, no president is totally responsible for the performance of the market or the economy as a whole, but the market does take its cues from the president’s policies and approach. The business community—including the market—loves certainty and low costs of doing business. When an administration throws unpredictable, inexplicable, politically-motivated regulations and higher taxes in the path of companies, those companies hunker down and play things close to the vest, frightened and unsure of what’s coming next. Hiring and capital investment slows to the bare minimum. This administration, in contrast, has earned the confidence of the business community by rolling back punitive regulations and lowering taxes in a common-sense fashion and it shows in the markets’ performance and the GDP’s growth (finally, consistently above 3%, something that eluded the anti-business Obama administration)..

The current market is definitely gratifying and reassuring to 46-year-old Joe Average who has a retirement 401k with his employer of 17 years. It’s also a brow-wiping “Whew!” to institutional investors whose job it is to keep millions of dollars’ worth of State and Municipal pension funds stable and solvent. This market performance is flat-out good news to anyone who has any financial involvement at all in the markets—which is virtually everyone who has investments or a retirement plan of any kind.

Yet the major liberal media virtually ignore this aspect of the economy (along with the closely-related aspects of strong job creation and low unemployment), simply and transparently because it benefits the Republicans. When the market pendulum swings the other way—and it will, without question—all of a sudden, the markets’ negative performance under a supposed business expert Republican president will be front and center in their news reporting. Right now, the economy—the most important issue to virtually every voter, without a doubt—is doing well, so Democrats and their allies don’t want to touch it. Better for them to obsess over “collusion” or the First Lady’s heels or trying to blame every shooting in America on Republicans.

It’s a nice racket the liberal media have carved out for themselves: Cover only good news for Democrats and only bad news for Republicans.