With Bidenomics proving a failure, and President Biden's economic approval ratings near historic lows, the White House may latch on to one piece of positive news to help the president's struggling reelection campaign: the stock market. New reports show that, thanks to recent gains, the stock market has now seen larger growth under the Biden presidency than at the same point under President Trump. But the current snapshot fails to take into account many variables. The COVID-19 pandemic arrived during the final year of Trump's presidency, and caused an historic drop in the markets. And right now, experts remain uncertain as to whether the current stock surge will continue through the rest of Biden's term.
The Biden-Trump market comparisons also bring up the question of whether a president really has that much of an impact on the stock market, anyway. "I think this has more to do with increases in the Federal Reserve's balance sheet, and how much money they're putting into the economy, and the fact that they're supposedly going to cut interest rates this year," says Vance Ginn, Texas-based economist. "So there's a lot of other factors at play."
Ginn notes the Biden and Trump presidencies are taking place during far different economic times, with different Fed policies. Thus, looking at the stock market under each president is not an apples-to-apples comparison. "Under Biden, there's been a dramatic increase in liquidity---the largest ever---by the Federal Reserve, which is putting more money in the stock market," he tells KTRH.
The Biden presidency has also coincided with the AI boom, compared by some analysts to the 'dot-com boom' of the late 1990s. "The recent stock market surge has really been driven by only about 10 firms," says Ginn. "Artificial intelligence and technology companies, that's what's really been driving this growth...as compared to the Trump years, which was much more broad-based economic growth."
While team Biden may be gearing up to tout the stock market as a feather in the Bidenomics cap, Ginn warns they may not want to hang any mission accomplished banners just yet. "To me, this stock market is overpriced, and it's likely to come down before it goes up a lot," he says. "And, I think that is also reflective of the overall economy."
Photo: AFP