Dem
51
GOP
49
When James Glassman and Kevin Hassett wrote their book Dow 36,000, published in Sept. 1999, the Dow Jones index closed at 10,730 at the end of the month. Critics scoffed at the idea the index would more than triple, especially since the authors said it would happen within 5 years. Serious economists pooh-poohed the idea. No one believed it. Yesterday, the Dow Jones jumped 500 points and closed at 37,090, the highest in its history. The jump was largely due to the Fed saying that there would not be any more interest hikes. Of course, it is now 24 years later, but it did make it and then some. Here is a logarithmic plot from 2003 to yesterday.
So, what's the political angle on this? If the stock market keeps going up, millions of people will be happy when they get their 401(k) statements. This will allow Joe Biden and the Democrats to crow: unemployment is at a historical low, inflation is way down, and now the stock market and people's retirement funds are heading toward the moon. Inflation is hard for an individual to measure. Yes, they know the price of gas and eggs, although they tend to forget they are earning more than they did a year ago in many cases. But the 401(k) statements are very personal and brokers and banks tend to fill the statements with graphs that show your account is worth a lot more now than it was last year. That is something voters can understand because it is more personal than national statistics. Will this help Biden make the case that the economy is doing well under his management? It certainly won't hurt if this keeps up. (V)