Monday, January 8, 2018

Who's Done More?

Which president has done more for African Americans: Barack Obama, for whom 92% of African Americans voted, or Donald Trump who received only 8% of the African American vote?

If one goes by the unemployment figures the answer is easily Donald Trump. In 2010 black unemployment soared to 16.5% and never fell below 8.2% until the last two months of 2016 when it touched 7.9.

The lowest black unemployment had ever been was 7% during the dot-com boom of 2000.

This is certainly good news for the African American community although Trump's critics are quick to point out that black unemployment is still higher than that of whites (3.7%) and that blacks continue to lag far behind whites in pay, wealth and home ownership. Even so, the gaps are narrowing and under no other president, including the first black president, have the economic prospects looked better for so many blacks as they do now.

Parenthetically, as the Dow scores record highs, stretching well past 25,000, it's somewhat amusing to recall the fretful pre-election predictions that a Trump victory would surely cause the stock market to crash. Here are some excerpts, for example, from an article in Politico in October 2016:
Wall Street is set up for a major crash if Donald Trump shocks the world on Election Day and wins the White House.

New research out on Friday suggests that financial markets strongly prefer a Hillary Clinton presidency and could react with panicked selling should Trump defy the polls and deliver a shocking upset on Nov. 8.

“Wall Street clearly prefers a Clinton win certainly from the prospective of equity prices,” said Dartmouth College’s Eric Zitzewitz, one of the authors of the new study along with the University of Michigan’s Justin Wolfers. “You saw Clinton win the first debate and her odds jumped and stocks moved right along with it. Should Trump somehow manage to win you could see major Brexit-style selling.”

The new report suggests that the stock market is worth 11 percent more under a Clinton presidency than a Trump presidency. This is a highly unusual circumstance because markets historically prefer Republican policies on taxes, regulation and trade to those of Democrats.

And while Trump has pledged to rip up free trade deals and slap tariffs on imports, he has also pledged massive tax cuts on individuals and businesses, policies that Wall Street investors usually embrace....

This also suggests that a shock Trump victory next month could crush stock prices, perhaps by as much as 10 percent, and send the peso and other currencies sharply lower while ushering in a period of intense market volatility as investors try and discern how Trump would govern and whether he would make good on his pledge to start trade wars with Mexico and China and deport 11 million current undocumented immigrants.

“You would see incredible pressure on stock prices if Trump wins and everyone flooding into rare metals like gold and into bonds” in the U.S., Germany and the United Kingdom, said Erik Jones, professor at the Johns Hopkins University School of Advanced International Studies....

Overall, the authors of the new paper envision a massive global market shock should Trump win. “Given the magnitude of the price movements, we estimate that market participants believe that a Trump victory would reduce the value of the S&P 500, the UK, and Asian stock markets by 10-15%,” they write and “would reduce the oil price by $4, would lead to a 25% decline in the Mexican Peso, and would significantly increase expected future stock market volatility.”
When Donald Trump took office the Dow was just under 20,000. It subsequently "crashed" to just under 25,300 today. Maybe those economic shamans who predicted calamity if Trump won should invest a little of the profit reaped from their investments in 2017 in a new set of chicken bones.