LARRY KUDLOW: President Trump can't afford to lose the stock market zeitgeist
President Trump can't afford to lose the stock market zeitgeist and that's the subject of the riff. Just for one moment, if we can take our eyes off the China spy balloons 2.0 drone story that the greatest military and technological power in the world can't seem to figure out – who, when, where or why – how about we go back to Donald Trump yesterday ringing the bell at the New York Stock Exchange as Time magazine's "Person of the Year." This is Mr. Trump capturing the stock market zeitgeist. It's a happier story than the drones.
Donald Trump pays a lot of attention to the stock market, as well he should. It's a business signal. It's a growth signal. It's a countrywide wealth and well-being signal and President Trump's not the only one who thinks the stock market is important.
Our colleague John Carney of the Breitbart Business Digest points to a very interesting YouGov survey – where 62% of Americans say the stock market is either somewhat or very important. Black Americans are slightly more likely to think stocks are important than White Americans, but it's almost even at about 65%. Hispanics only slightly less so.
Equally surprising, it's not just rich people who care about the stock market. According to the poll, almost half of Americans who make under $50k say the stock market is important. Among earners between $50-100K, 65% think the market is very or somewhat important. Those are middle-class folks. Those are Trumpian working-class coalition folks.
Now in real inflation-adjusted terms, up until this past election day, the S&P 500 gained 15% under Biden. Under Trump's first term, it was up 51%. Quite a difference. Not a surprise. Mr. Trump likes business. Mr. Biden dislikes business. Mr. Trump is cutting taxes and regulations. Mr. Biden raised them. During Mr. Trump's first term, inflation was practically nil. During Mr. Biden's term, inflation hit a 40-year high.
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However, after soaring almost 3,000 points in the month after the Trump landslide, the Dow Jones index has fallen back 1,200 points in the last 10 days and while Mr. Trump told the NYSE that he was going to cut the corporate tax to 15% for companies producing domestically, talk in the Senate and inside Mr. Trump's own transition team of delaying the tax cuts is now causing a stock market pull-back.
This should be a signal to the president-elect to go for tax cuts right away, combined with his other policy priorities, and not to wait until the back end of the year – when the whole tax cut story could fall apart. Now Mr. President, you wouldn't want to lose that stock market zeitgeist – would you? That's the riff.
This article is adapted from Larry Kudlow’s opening commentary on the Dec. 13, 2024, edition of "Kudlow."