I would be remiss if I did not mention the events of last week, in the U.S., when a large group of people stormed the Capitol, breaking into the building, destroying property and, eventually, lives. It was a scene Americans have only seen in countries with highly militant dictatorships or fascist rulers. Instead, it was fueled by a homeland lame-duck president desperately clinging to his delusions and most likely, feeling vindicated by the mob he created.
Don't get me wrong. The way he told the crowd he loved them and then later saying he regretted committing to a peaceful transfer of power and denouncing the violence shows that Trump IS pro anarchy and fascism. He is not about democracy in any way, shape or form.
Now, what does all this have to do with finances? Well, everything. Because money is what motivates what a lot of people say, do and act. After all, "It's the economy, stupid."
I read a few articles last week that paralleled what is happening with the rise of Hitler, during a time of economic turmoil, and how business leaders turned a blind eye in order to reap the benefits of Hitler's economic stimulus plans...
How about those plutocrats in early 1930s Germany who liked the fact that Hitler was rearming and industrializing, spending money and getting them out of recession and driving the economy forward through his stimulus spending on war material?
-Lloyd Blankfein, former chief executive of Goldman Sachs, who's a bit of a history buff.
The same thing happened with many U.S. businesses and business leaders in the last four years. In fact, many leaders directly supported Trump's presidency by donating huge sums of money. It's troublesome to see that kind of influence. It's what happens in a lot of morally corrupt countries, and when we see someone getting caught doing it, we call it a bribe. However, when these companies go through "proper legal channels," it's just considered a contribution. But wait...isn't that what a lot of the Democratic presidential nominees were fighting against -- taking money from big corporations, and then being beholden to them, to curry political and economic favors in the future?
Many companies have since reviewed political giving through their corporate political action committees:
Some companies are pausing donations to specific politicians:
And today...Hallmark issued this statement:
However, what Twitter, Facebook and other companies are doing by revoking Trump's access isn't quite something to applaud. They're just doing what legally needs to get done, when someone uses a public forum that could lead to danger. Remember, it's NOT free speech to yell "fire" in a crowded theater. You can and will be arrested, especially if someone gets hurt, from the chaos.
The other part of what happened last week that has to do with money is what I never have understood in these last four years. It's the people who are not doing well, financially, and who continue to support Trump. They keep believing that he will be their savior, when he has not done anything to help lift up those in poverty. Anytime I have ever asked a Trump supporter why they support him, the majority say it's because the stock market has gone up since he's been in office. Now, how many financially down-trodden people are really invested in the stock market? And if someone is investing in the market but not able to pay for rent or food, I would want to ask, what are your priorities? One more point on the stock market...last week, when the insurgents were sitting on Nancy Pelosi's desk and carrying confederate flags into the Capitol building, the stock market went up. The Dow even set a record. (The stock market also went up when Joe Biden won the election, back in November.)
So, how much did Trump truly influence the economy and the stock market? Well, for some business leaders who supported him in his presidency by donating those large sums of money, they believed that lower corporate taxes and more lax regulation helped.
While other Investment Experts believe the stock market generally looks at economic conditions, corporate profits and interest rates, regardless of who is in office. CFA (Chartered Financial Analyst) Craig Fehr wrote on Edward Jones' Weekly Market Update that:
- Broadly, the market has done well in the year after a presidential election, posting an average return of 10.2%.
- When a Democratic president took office following a Republican White House, the average stock market return in the following year was 14.1%.
- When an election produced the same political party in control of the White House and Congress, the average return the next year was 11.8%. When it was the Democratic party in control, the market returned 13.7%.
Finally, he goes on to say:
"We think a new bull market has begun. While we don't expect it to last as long as the one that ended in early 2020 (an 11-year bull market), we think the combination of economic growth (domestically and globally), rising corporate earnings, and low interest rates will give this market legs in the coming years."
Finally, as I've mentioned before many times, we should all be more aware of where we spend our money and continue voting with our dollars, by spending on companies with values that are aligned. It's the best way to ensure that people with character and strong moral values are in positions of power. It's a small thing we can all do, and yet, it has huge ripple effects in the world.