- The Washington Times - Tuesday, December 13, 2016

ANALYSIS/OPINION:

On Tuesday, the Dow Jones Industrial Average neared 20,000 for the first time.

The day prior, the blue-chip index notched its 15th record close, spurred by a surge in financial and industrial companies.

Since Donald Trump’s surprising victory against Hillary Clinton on Nov. 8, the major indexes have risen at least 4.5 percent, with the small-caps Russell 2000 soaring more than 15 percent, according to CNBC.

Small businesses are also getting excited — the November reading of the National Federation of Independent Businesses’ small business optimism index jumped to 98.4 from 94.9 — its sharpest surge since 2009 — with all of the increase in sentiment coming after Nov. 8, Bloomberg reported on Tuesday.

Consumer confidence levels, which were released on Friday, jumped to a two year high.

Mr. Trump appears to be good for business.

In addition to promising to lower the corporate tax rate to 15 percent from 35 percent and investing in infrastructure, all of Mr. Trump’s Cabinet picks indicate federal deregulation is coming – and that’s a good thing for industry.

The Obama Administration was responsible for an unparalleled expansion of the regulatory state, on average, issuing one major rule every three days. More than $22 billion per year in new regulatory costs were imposed on Americans last year, pushing the total regulatory burden for the Obama years to exceed $100 billion annually.

A survey completed by the National Association of Manufacturers found that the average U.S. company has to pay $9,991 per employee per year to comply with Mr. Obama’s federal regulations, making them a job and growth killer.

Now, let’s sit back and take a look at what the mainstream media and talking heads had to say about Mr. Trump’s effect on the markets.

The day after Mr. Trump was elected, David Remnick at the New Yorker predicted Mr. Trump’s victory would “set markets tumbling.” New York Times columnist and economist Paul Krugman boldly forecast the markets would “never recover” under a Trump presidency.

“We are very probably looking at a global recession, with no end in sight,” Mr. Krugman wrote in a blog post Nov. 9adding: “I suppose we could get lucky somehow. But on economics, as on everything else, a terrible thing has just happened.”

Before the election, CNN Money opined: “A Trump triumph would likely cause investors to flee stocks to the safety of gold and bonds,” and that “he’s campaigned on an anti-trade agenda, which wouldn’t be good for big business.”

Simon Johnson, a professor at MIT’s Sloan School of Management wrote in MarketWatch on Nov.1: “A big adverse surprise — like the election of Donald Trump in the U.S. — would likely cause the stock market to crash and plunge the world into recession.”

There’s no doubt the market fluctuates – and what goes up must come down. Inevitably, if Mr. Trump fails to deliver on some of his promises – most notably lowering the corporate tax rate – stocks will plunge. Traders famously buy on rumor and sell on fact.

But for now, there’s optimism. And it feels good.


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