A Dow 25,000 was the stuff of fevered fantasy, difficult for the most enthusiastic fan of Donald Trump to imagine on the eve of his inauguration. The Dow was bumping “only” 18,500 on Election Day 2016. But here we are, one year on, and a Dow 25,000 is here.
In the 14 or so months since the Trump election, the stock market has soared by more than 35 percent. The economist Arthur Laffer estimates this bull market has increased America’s net wealth by $6 trillion - that’s trillion with a “t” - and maybe more.
The president’s critics can argue only that only the super rich benefit from a strong stock market, but that’s plain and demonstrably silly. The stock market is a measure, and not the only one, of the health of the economy, but more importantly, it measures the confidence, optimism and expectations of the future of the economy. If anyone doubts that a strong stock market helps the working stiff, he should consider the alternative. When the stock market crashed in 2008, more than 7 million Americans lost their jobs.
Companies losing money, or whose stock values are falling, don’t respond by raising pay or hiring more workers. A rising stock market doesn’t necessarily mean more jobs and higher wages at once, but a rising market is nearly always a harbinger of good times ahead.
It’s further nonsense to say that only the rich benefit from a rising stock market. Fifty-five million Americans have 401k plans. There are tens of millions more with IRAs and pensions.