You can scarcely open Twitter without seeing something you don’t want to see, irrespective of how scrupulous you’ve been in choosing who to follow.
Earlier this week, while attempting to source a soundbite from Nancy Pelosi on stimulus talks, I ran across a rather unfortunate short clip of what looked like a kind of ad hoc, parking lot gathering of Donald Trump supporters — a tailgate without the football game.
People milled aimlessly about, moving between a smattering of late 90s sedans and a handful of trucks with flags mounted to their beds.
An angry man approached someone shooting a video of the proceedings on his phone. “Can you say that again?,” the cameraman asked, his voice dripping with amused condescension.
The subject enthusiastically obliged. “Joe Biiiiden waunts to dismainle this country. Are you stooooooopid?!,” the gentleman wondered, in a language that vaguely resembled English.
Delighted giggles emanating from behind the phone’s operator suggested the cameraman and his compatriots got just what they wanted: A walking, yelling stereotype. They treated him like a circus attraction. And then they posted him on Twitter, effectively giving millions a free ticket to the show.
In reality, that man is a victim. Poorly educated, clearly. And still buying a wholly implausible story sold to people like him all around the country by a charlatan whose entire life was spent peddling lies. It’s terribly sad, especially in its second incarnation.
I’ve variously described Joe Biden as a D.C. wall fixture and a consummate Beltway horse trader with no real designs on shaking anything up beyond what’s necessary to pacify a progressive movement whose time is coming, just not yet. I stand by that assessment.
But that’s almost beside the point in 2020. What matters now isn’t the “revolution,” as it were. Rather, what matters is bringing the country back from the brink. Biden is eminently more likable than Hillary Clinton. There’s not a shred of smugness in his demeanor, and his life story is, frankly, a tale of recurring tragedies interspersed with triumphs that, even when aggregated, pale in comparison to the losses and setbacks suffered along the way.
The very last thing Biden wants to do is “dismantle” the country. And folks like the man in the video described above would almost surely benefit from his policy platform which is gently (so, not at all radically) redistributive. More germane for disenchanted, white, lower-income Americans, Biden’s pitch is deliberately couched in much of the same blue collar-oriented rhetoric that helped Trump win in 2016, only sans disingenuous, cold-hearted, billionaire Manhattan real estate developer.
If there’s a process behind my writing, it essentially entails keeping a mental Rolodex of incremental information, charts, anecdotes, and quotables and waiting on the right opportunity to use them as anchors for articles that expand on a familiar list of subjects and themes. The man in the parking lot was in that mental Rolodex and so was the following chart:
A Pew study conducted in September of 2019 showed that around one-third of US adults (35%) personally owned stocks, bonds, or mutual funds outside of retirement accounts.
I nearly added the word “just” to the preceding sentence. That is, it initially said: “A Pew study conducted in September of 2019, showed that just around one-third of US adults (35%) personally owned stocks, bonds, or mutual funds outside of retirement accounts.” Leaving out “just” allows the reader to make their own, subjective judgement as to whether 35% is a respectable figure or not when it comes to financial asset ownership outside of retirement funds.
What isn’t subjective, though, is the fact that 14% is not high a number in this context, and that’s the percentage of lower-income Americans who own financial assets outside of an IRA or a 401(k). Also objectively low is the number (26%) of lower-income Americans who own financial assets through a retirement account. Less than half of that income group reported having a plain, old savings account.
Note that just 38% of middle-income Americans reported holding financial assets outside of a retirement fund.
For the better part of three years, Trump has repeated some version of “How’s your 401(k) doing?” while obsessively documenting every record high on the Dow in a bid to simultaneously mythologize his own impact on stock prices and suggest that surging equities are a boon to his base. It’s a false narrative on both accounts.
Trump habitually panders to a base that’s at least partially comprised of undereducated, working Americans who can generally be described as “downtrodden.” The reality is, most of those people don’t own any stocks outside of retirement accounts. In the case of any lower-income Americans who might be inclined to vote for the president, virtually none of them have personal investment accounts.
The numbers are higher for retirement accounts, but even there, less than two-thirds of the middle-class, and just a quarter of lower-income households, have 401(k)s or IRAs, based on the Pew study. While the long-term trajectory of equities is important for those folks, the short-term is largely irrelevant.
Crucially, these numbers are for ownership — any ownership. They’re not about concentration. Just because you own some stocks (in a retirement account or a personal account) doesn’t mean you own many stocks. And even if you think what you own counts as “a lot,” that is everywhere and always a relative term.
Underscoring that is Bloomberg’s Sarah Ponczek, who on Saturday wrote that the “divergence” between Trump as the president “most likely to kowtow to investor whims [and] Biden as the candidate who says his policies will be aimed at boosting everything but the 10% of American families who own 84% of all stocks, is a difference that might matter if all you care about is share prices.”
The same Pew study cited above showed that just 25% of Americans said the stock market contributed a “great deal” to their opinion of how the economy is performing. In fact, the stock market barely matters more to Americans than gas prices, if that tells you anything about how widespread stock ownership isn’t.
Sadly, nearly three-quarters of Americans say the federal budget deficit matters when it comes to their assessment of the US economy. That is a truly unfortunate finding, given that the deficit is actually their surplus.
The tragic part about all of this is that Trump has managed to convince large numbers of voters who neither own, nor care about, stocks, to care about them when it comes time to vote.
At rallies attended overwhelmingly by people who aren’t any semblance of rich and who are entirely unlikely to have sizable sums tied up in financial assets, Trump talks up the stocks the crowd doesn’t own. Invariably, they cheer — delirious for the very dynamics that are putting them further and further behind in an economic race that was already rigged against them, and became even more so in 2017 with Trump’s tax cuts for the rich and for corporations.
How many makeshift, parking lot, Trump tailgate gatherings do you imagine include discussions about elevated multiples and whether or not 10s at 80 basis points can still provide a hedge in an equity selloff?
My guess is not many.
24 thoughts on “Americans Don’t Really Care About The Stock Market. But You Can Sure Fool Them”
The fact that stupid people back Trump doesn’t surprise me. What does surprise me is how many smart people back him! And I attribute it to Fox News, which I think is the worst thing that’s happened to this country in the last 20 years. Very smart friends of mine buy all the crap that Fox peddles, and it just amazes me…and sadly, makes me think less of them as a result.
As does CNN.
At least CNN tries to tell the truth. Fox makes no pretense of honesty.
Actually, I’d include MSN as well. While Fox presentation is structured like the WWF (who will win the argument-Captain America or the Iron Sheik?) both CNN and MSN have a style that is very appealing to the liberal intellectual-the appearance of being fact based and balanced. Remember the magician controls the direction and engagement of your attention. The “news” also engages your emotion…the hook is what keeps you watching.
The appearance? I find CNN to be insufferably pro-America in its discussions of foreign affairs but, that asides, it seems pretty fact based.
When people ask my sister how our father died, she says, “Fox News killed him.” If they dare engage her, she adds, “It’s just like poison. Take in enough and it will kill you.”
So sad, but I guess so true.
As a California resident, this discussion reminds of prop 13 and how it has become a sacred cow here. For those that are unaware, prop 13 caps property tax increases at 2% per year as long as you (or your heirs) own the property. It’s a huge giveaway to the wealthy at the expense of new homeowners much like the tax cuts of the past 40 years. They use scare tactics like kicking granny out of her house because she can’t pay her property taxes while ignoring that granny is probably sitting on a six figure (or more) equity gain just by virtue of owning their house. Meanwhile, wealthy homeowners continue to build huge amounts of equity and hold onto properties to rent them out because of the massive tax subsidies they receive. This reinforces the cycle of higher property values because fewer units come on the market and fuels massive wealth inequality. Similar houses in a similar neighborhood can have tax bills that vary by thousands or tens of thousands of dollars, but no politician will touch the subject because at the end of the day these people will fight tooth and nail to protect their advantage and scare the rest of the population with stories of massive tax increase when in reality the overall taxes would just be spread more evenly.
Until last night (Friday, Oct 30) I was pretty convinced that Biden had a better then 50% chance of winning. Then I went to visit some friends in an upscale part of Northern Virginia, a community called Del Ray where the typical home goes for over $1 million. Both of them hold master’s, they are obviously affluent, early 50’s, white, and both now support Trump after supporting Clinton in the last election. I left their house last night in a minor state of shock and firmly convinced that Trump will be re-elected.
When I walked in the door I had no clue they had become Trump supporters. I made an off-hand remark about a Trump comment and she said to me “we support Trump watch what you say”. Her best friend was also there and we both looked at each other in total surprise. Her friend lives several blocks away, they see each other a couple of times a week and it was apparent this was the first time she had heard that as well. They do not have a sign in their yard, they don’t shout it out, and she couldn’t (wouldn’t) really explain why the change. These two intelligent, college educated, upper middle class, formerly moderate people had become all in for Trump.
All the above is to illustrate that there are large number of people that are not showing up in the 2020 polling just like they did not show up in the 2016 polling but they are going to vote and they will vote on Nov 3rd. My personal belief is that at this moment Trump will carry FL, PA, MI, and most likely WS because of people like my friends above. The old saying “Quiet but Deadly” still holds true.
My personal politics are centrist (in another day I would have been labeled conservative) but if pressed I would like to vote for someone like Gerald Ford. If you are too young to know that name google it. It is worth the time. He was vilified for a pardon but at that moment in history it was the best outcome that could be had. He was for a brief time what a true USA president should be.
The current situation is so ridiculous that laughing and crying are both the correct answer. If ever a time in my life I wanted to be wrong…
They probably always supported Trump and hoped to shock you. These are the bully boy segment that hope you to be naked and afraid.
Stupid / mentally ill comes in many forms. I know a university professor in a hard discipline who is a devout Catholic. Success, money, education, none of it is any barrier to the onset of aberrant mantal conditions. The only way in which their position makes sense is if they are mistakenly deciding that he is ‘the lesser of 2 evils’. That’s like saying “There’s no coke in the shop, so I’ll drink bleach. It’s that or the rat poison.”
There’s a big difference between being intelligence and ignorance. The US has lots of ignorance. PT Barnum knew this. Donald Trump counts on it.
Does appear that we will flush Donald November 3rd and he will go rapidly swirling to his natural home.
Trump has done a masterful job of convincing his base that the stock market is the economy, and the economy is a proxy for American exceptionalism. Given the data above regarding equity and 401k ownership, it’s a logical explanation – they don’t have a literal vested interest in the stock market, but they live in America with the best economy in the world…so MAGA!
Threat of national debt and your 401 is what runs cover for not having to acknowledge what was once easy.
White deniability. If I say to a blue collar guy, stop the words and just say you hate blackie they shut up with a smile on their face..
Educated people drag out Dalio / some such. When I beg to have it explained to me I get the brush off. Thats when bringing up race gets interesting. Then I get that it has no part of their thinking. Not a discussion. The cleverest people tell the cleverest lies to themselves about themselves.
When the democratic primary race in 2008 came down to Hillary and Obama, I said to myself that the democrats had thrown the race away because Americans were not prepared to elect either a black or a woman. I was kind of wrong. Kind of because I think the election of Trump with his explicit racism was in large measure a pushback. So now it’s harder to obfuscate. Like PTR’s comment above, you’re either pro-elitist and willing to tolerate the racism (or actually like it) or you’re not.
Recall that white supremacy was at the core of the founding of the United States, that the constitution both enshrined slavery and catered to slave-holding states to cement the union, and that it is still with us today, in attitudes and in institutions, not least of which are the electoral college and the structure of the Senate. If you’re white in America and feel threatened by Blacks, Latinos, Asians, you support Trump. If you’re a fundamentalist Protestant or Catholic Christian, you support Trump. A majority of whites voted for Trump in 2016. Why should we be surprised if the educated Virginians discussed above support him now? Support for Trump aligns with a gut feeling that True America and True Americans are white and Christian, and that everybody else should know their place. People will rearrange their economic beliefs in whatever way is necessary to accommodate their gut racial/ethnic and religious beliefs.
Succinct and well said, sir. 100 percent.
Your philosophy will go the way of the Dodo birds.
Mr Imperfect, I am not advocating this philosophy.
There is a married young 30 something Africa American with 4 little ones who makes his home in his uncle’s basement, across the street from me, here in the upper middle class suburbs of Atlanta.
Anthony used to work for a landscaping company but was unhappy with his meager paycheck. He is not quite as bright as he thinks but is bold and brave enough to have networked his way into doing yard construction projects and striking out on his own. I am happy to help people trying to start their own thing and have used his bringing in his “team” for a project earlier last year.
Ran into him this week after storm winds dropped a tree nearby. Chatted a bit. As I was walking away remembering to do my part to get out the vote I asked “Hey Anthony, did you vote?” He said “Yeah, I voted for Trump.” I must have frozen cause he asked “Who’d you vote for?” After I told him I’d voted for the other guy he explained, “Well you know I’m a businessman now and Trump is a businessman. I haven’t heard anything about business from Biden.” I slowly backed away from that meeting, holding my breath, trying not to freak out. Wondering how many other Anthony’s there are out there.
You can’t put all the Trump supporters in the same box. They’re all different, as are all the Biden supporters. But, if you believe that democracy and the rule of law are to survive in America, you are probably a Biden supporter. If you don’t know that Democracy and the rule of law are threatened you are more likely a Trump supporter.
Of all the 401(k)s I’ve ever had, you determine your allocation into some mutual fund, which most are funds of funds.Most people have no idea what they’re investing in. They don’t know what price they’re buying the shares for until after the NAVs have been calculated after the markets close, and they don’t know what price they’re selling the shares for until after the NAVs have been calculated after the markets close.
Plus, most people just “buy” shares in mutual funds on the day they get their paychecks.
Now, that, right there is what I call astute investing.