Donald Trump continues to seek to get Americans to vote for him and paints a grim portrait of a collapsing US economy if they elect Joe Biden's president this November.
However, the economists at Wall Street and the big banks paint a very different picture.
According to their vision, not just a Biden victory, but a Biden victory accompanied by Democrats who also gain control of both houses of Congress would fuel the strongest and most stable economic recovery.
Who says that? Well, Moody's Analytics, led by Mark Zandi, who advised Senator John McCain during his 2008 presidential election, clearly concluded in its most recent report:
"The economic outlook is strongest under the scenario where Biden and the Democrats sweep Congress and fully adopt their economic agenda."
Moody's analysis confirmed what Biden had tried to suggest in the first presidential debate on and against Trump's incessant interruptions: Biden's economic proposal would create 7.4 million jobs. Additionally, the report elaborates Biden's plan, which promises to get the economy back to full employment in the second half of 2022, two years ahead of the projections in Trump's plan.
And what about the stock market crash that Trump prophesied under the Biden presidency?
Well, Goldman Sachs has made its customers aware that surveys "suggest that a" blue wave "in which Democrats gain unified control of Washington is becoming more likely," and they have informed their customers that such a result is happening is a good sign of strong stock market performance.
Goldman's chief economist, Jan Hatzius, did not advise his customers to sell stocks, but instead wrote in a report released last Monday after a tweet from Trump predicting an economic disaster, "Everything else is the same, one such a blue wave would most likely prompt us to update our forecasts. "
Recent market volatility has been motivated by uncertainties about whether or not to pass a stimulus package to provide relief to struggling Americans during the pandemic. Trump's flip-flops on whether or not his government will negotiate such a package were the main cause of this uncertainty.
Specifically, the Goldman Sachs report highlighted that a blue wave would "greatly increase" the likelihood that Congress will pass a $ 2 trillion stimulus package after the inauguration in January.
In short, Wall Street even supports democratic politics as better for the economy. In addition, Biden's proposed long-term infrastructure, health care, climate change and education spending is seen as positive for the long-term health and stability of the economy, so these will rise even though the bank imposes higher taxes and regulations would be offset by these improvements in the overall economy . In the words of the report, "This would likely result in much simpler US fiscal policies, lower risk of trade escalation and firmer global growth prospects," the report said.
Wall Street seems smart enough to look at the economy better than Trump does. It recognizes that the average American's economic health and basic necessities have a lot to do with overall economic success.
Like CNN business journalist Paul R. La Monica in his recent article, “Biden Wants to Reverse Trump's Tax Cuts. Wall Street supports him anyway ":
“A Biden victory could also lead to a slightly higher income tax rate for the upper middle class and the rich. But you can't look at the tax picture without analyzing what the overall economy might look like if either Biden or Trump gave more momentum. "
Indeed, as one fund manager points out to La Monica, “. . . Any new policies that empower the middle class should give consumers more confidence to borrow more. "
In other words, Wall Street is now looking for lavish economic policies to ensure the continued creation of wealth and health of the economy.
The markets sent the same message for most of September. For example, last Monday, September 21st, after the S&P 500 index had its first four-day losing streak since February and the Dow Jones Industrial fell 500 points, CNBC's Fred Imbert added this decline to “fears of a possible The worsening of the coronavirus pandemic "and the uncertainty about further fiscal incentives in the USA", both of which had "unsettled retailers".
That brutal Monday for the stock market started a week that marked a four-week losing streak for both the Dow and the S&P 500, the longest losing streak since August 2019.
As Trump ceaselessly denies reality – be it the reality of coronavirus, systemic racism, or the economic hardship Americans suffer – the stock market has apparently refused to participate in Trump's Panglossian denials of who we are All Witnesses, we should be careful to pay attention right before our eyes, especially when it comes to Trump's pathetic failure to deal with the pandemic, let alone creating political chaos rather than running his party in passing more tax relief for desperate Americans.
Brad Kinkelaar, a global portfolio manager at Barrow Hanley, told CNBC, "This is a health problem and we still haven't made any progress. We don't have a vaccine yet. Obviously there is still no cure and we're still thinking about how we can deal with the crisis. "
According to Kinkelaar, the markets had subscribed to Trump's magical thought, at least for a while, that the coronavirus would simply go away without taking any action with a nationally coordinated response, which brought us back to normal. He stated, "So it is not surprising that we have moved from a market that is essentially pricing in a resumption of normal activity within a reasonable time frame at a price thinking that we have not yet figured it out."
As strategists at another company noted, "After a buoyant and hopeful summer, financial markets are cooling off in the face of reality."
Markets rebounded this week as the prospect of a stimulus package improved, but also as the prospect of a Biden win and a democratic orientation in Congress improved.
It seems best to ignore Trump's fantastic paintings of the economic forecast and pay attention to the Wall Street crystal ball.
Tim Libretti is a professor of American literature and culture at a state university in Chicago. A longtime progressive voice, he has published numerous academic and journalistic articles on culture, class, race, gender, and politics, for which he has received awards from the Working Class Studies Association, the International Labor Communications Association, and the National Federation of Press Women and the Illinois Woman & # 39; s Press Association.