Market Losses; an Economic Downturn? Sure. But Thanks to Biden, There Isn't (Yet) a Panic
Stock market pullbacks and economic drawdowns happen periodically. But panics that lead to market routs and economic mayhem are usually a result of the masses being driven into a panic, and here is where having Joe Biden as president is so helpful.
Consider where we stand mid-to-late May 2022:
The price for a gallon gas regular is 50% higher nationally than the same week a year ago and has been hitting new record highs almost daily the last few weeks. The price for Diesel is up almost 100% from a year ago, and natural gas is up even more. Inflation numbers on the producer and consumer fronts are at 40-year highs and were worse a month earlier. Applications for mortgages are down double digits from the same week a year ago, and applications for unemployment benefits for laid-off workers have been up weekly over the last four weeks. For the first three months of this year, the economy contracted, and there is a sense that numbers won't be good for the current three months of April-May-June.
Numbers from major retailers were so bad recently that stock prices of big names - including Walmart and Target - had their worst one-day crash since 1987, and one company (Ross Stores) had its worst one-day performance since 1985. Share prices of many big-tech names are down 50% or more from their all-time highs reached over the past 52 weeks. The stock market is in such a long downhill spiral that when trading ended on Friday, May 20th, the Dow Jones Industrial Average (an index that tracks thirty of the most powerful publicly traded companies) was down for its eighth week; the most extended weekly losses since 1923. Again, 1923; that's 99 years ago. The NASDAQ (which reflects the movement of many companies) and the S&P 500 (which reflects the movement of 500-plus of the largest public companies) were both down for seven weeks in a row; the longest such downhill run since early 2001, which is 21 years ago. Put differently, the Dow had now a more extended downhill spiral than during or after the Great Depression; World War II; JFK's assassination in 1963; the energy crisis of 1973-1974; hyperinflation of 1980-1982; the first Iraq War; the Tech Bust of 2000; the terror attacks of 2001; the Iraq War of 2003; the Great Recession of 2008 and the early weeks of the 2020 lockdowns. The two other and broader indexes had now worse runs than during and after 9/11, the Great Recession, and the lockdowns.
All around, the economy, the consumer, and the stock market are in deep pain; including in ways not seen in many decades (inflation); not seen in 99 years (length of losing weeks for the Dow), or never seen at all (record-high gas prices and happening at a steep speed). Yet, there is no panic; the market losses, for example, while steep, have been orderly.
Why is that?
Simple. This weekend, after the markets had the losses mentioned above and gas have again hit new records, I noticed that there are no above-the-fold in print, top-of-the-hour on radio, leading the web, or trending on social media news items about those disastrous numbers. On some news sites, I needed to scroll to news item numbers 30-40 to see anything about the economic, market, and consumer numbers, and even where I did manage to see such stories, they were matter-of-fact and not in a tone of OMG-we-are-all-going-to-die. This lack of drama was also on financial websites, where most didn't even have a headline about the Dow's losses being the longest since 1923, and those who did have it didn't post it as a lead story.
This lack of news coverage and the absence of panic-spreading top of the website/top of the hour items are thanks to president Biden being a Democrat and most of the media being run by Democrats who protect him. If these alarming economic and market developments happened under Republicans Bush or Trump, the public would be driven into a frenzied panic about them in the form of endless, leading stories. This type of coverage would have created a market and economic panic that we don't have now precisely because the masses are not driven into a panic.
Do people see stories here and there about gas, inflation, and market losses? Sure, I know about these things from reading the news. But there is a difference between news delivered just the basics - and some of the worst parts buried deep into an article or not even mentioned - versus an endless drumbeat of negativity hyped in tone and highlighted by placement atop-of-hour, above-the-fold. Thanks to Biden, we have avoided this until now, and him being president may help that the current problems should not be a memorable panic like March 2020, late 2008, and so forth.