The stock market has been up lately, perhaps in response to the Biden-Harris electoral victory. I wonder if this makes sense. Democrats promise a bigger government. The companies that are well situated to harvest contracts, bailouts, etc. are the biggest American companies. Investors could expect a disaster for small business owners and the working class (i.e., the folks who voted for Trump), but that shouldn’t discourage them from buying stock in publicly traded companies (i.e., the biggest U.S. companies).
From “The Biden Popular Front Is Doomed to Unravel” (New Republic):
It may turn out that Donald Trump was the one force keeping the Democratic Party together.
Trump didn’t sell out his supporters. In fact, his presidency saw something extraordinary, even if it was all but invisible from the country’s globalized cities: the first egalitarian boom since well back into the twentieth century. In 2019, the last non-Covid year, he presided over an average 3.7 percent unemployment rate and 4.7 percent wage growth among the lowest quartile of earners. All income brackets increased their take. That had happened in the last three Obama years, too. The difference is that in the Obama part of the boom, the income of the top decile rose by 20 percent, with tiny gains for other groups. In the Trump economy, the distribution was different. Net worth of the top 10 percent rose only marginally, while that of all other groups vaulted ahead. In 2019, the share of overall earnings going to the bottom 90 percent of earners rose for the first time in a decade.
The reasons for Trump’s success are not yet clear. They may well have involved his unorthodox policy choices: above all, limiting immigration.
So the good times for the elites might be even better soon! That’s a great reason to purchase stock in America’s largest companies owned by elites, managed by elites, and mostly employing the reasonably elite).