It took a pandemic to wipe out Trump's economic gains, which says a lot
by Tim Worstall
March 23, 2020 01:09 PM
At its close on Friday, the Dow Jones Industrial Average was 1% lower than it was on Jan. 20, 2017 — President Trump's inauguration. That's not good news for Trump or the rest of us. But another way of looking at it is that it took a global pandemic to wipe out the gains from the economic policies of the past three years.
That the Dow Jones Industrial Average went up is only mildly interesting, that it has fallen equally so. It's just a number after all. Except that numbers from markets and prices are information to the rest of us. Here, the varied indices are the best available vote on how current policies and events are going to affect the future economy. This is known as the efficient markets hypothesis.
For the education of those fresh out of a grievance studies major, this does not mean that markets are the efficient way of doing everything, nor even that efficiency is the desired goal of every action. It's only that markets are efficient at processing information. The insight being that, sure everyone's got an opinion, just like we all have a fundamental to sit upon. But using votes, or Twitter, or shouting matches (to the extent those last two differ) to determine what that agreement is suffers from a problem: too much noise from those with no skin in the game. In a market, by definition, everyone is using their own assets to lay out that opinion. That you've got to pay to play means that everyone does express what they really believe, not just what is fashionable or polite.
<..snip..>
[urlhttps://www.washingtonexaminer.com/opinion/it-took-a-pandemic-to-wipe-out-trumps-economic-gains-which-says-a-lot][/url]
