The last time this happened, voters didnāt credit Bill Clinton. That may be a bad omen, or a good one.
If the stock market chose presidents, Joe Biden would be a shoo-in for reelection in 2024. The market rallied this month amid growing optimism about the economy, with the S&P 500 zooming 1.9 percent Tuesday on news that the consumer price index rose only 3.2 percent in October (compared to 3.7 percent in September). Stocks rallied again Wednesday on news that the producer price index fell 0.5 percent. Commentators are no longer debating whether the economy will experience a āsoft landingā (i.e., a reduction in inflation without recession). The only question now is when it will arrive. The S&P 500 seems to have decided itās already here.
But the stock market doesnāt choose presidents. Voters do, and polls continue to show they think the economy is in terrible shape. A Financial TimesāMichigan Ross Nationwide Survey conducted November 2ā7 is absolutely brutal on this point.
āEcon 101ā is an oversimplification and doesnāt explain how the economy works practically. People donāt put off purchases because their money is supposedly worth 2% more after a year. Similarly, people donāt spend just because their money is supposedly worth 2% less after a year. According to you, people would only buy when there is a sale, unless itās an essential good, but it doesnāt work out that way. Tell me how well the car and housing markets are going under inflation.
Yes, the āEcon 101ā example is an oversimplification, itās why itās the āEcon 101ā example.
Yes, which is why it doesnāt apply to real life. Itās an oversimplification.
If you donāt understand the point of an oversimplified educational example, Iām afraid I cannot help you.
If you donāt understand how an oversimplified example doesnāt apply in real life, Iām afraid I cannot help you.
If you went through economy classes and didnāt realize our fractional reserve system is built on a house of cards and misguided principles there is no point where you would actually understand the concepts we are talking about here. People still have wants and needs. People buy housing whether rates are good or bad, because they need a place to sleep. Yes investment property purchases will drop, but thatās not the average american, nor is the average american realistically investing in the stock market beyond regular 401ks because we deregulated bank investments and you can no longer get a savings account for retirement saving. Stop measuring economy health based on manufactured data points like the stock market and you might actually understand how people function in an economy.