It’s accepted wisdom that in the matchup of Donald Trump vs. Joe Biden, voters despise their options. Supposedly Trump is the only individual Biden could beat, and supposedly Biden is Trump’s best shot to return to the White House. What a bullish scenario.
Except that pundits don’t agree. Ever of the view that “this election is the most important one of modern times,” and that democracy allegedly hangs in the balance if either Trump or Biden wins or loses, members of the commentariat insult the voters by lamenting whom the voters happened upon as candidates. As one prominent pundit gloomily put it in a recent opinion piece, “In 2024 the future—the onrushing, dangerous future—ought to be the theme of the presidential election. The challenge of all that’s coming should have brought forth smart young leaders. It’s a paradox—a kind of historical perversity—that two old men should be locked in a death struggle for leadership of a country of which each of them is a symptom of decline.” The conventional wisdom is wrong.
How readers should know it’s wrong is that the people are the market. While it’s theoretically possible that each and every gloomy pundit is smarter than every individual in the electorate, the collective wisdom of the “low-information voters” who populate the electorate is exponentially greater than that of a pundit class so eager to insult the electorate by claiming its passions led to Trump’s near assassination, along with Trump vs. Biden itself.
So while the experts claim Trump vs. Biden signals an unserious electorate, one that embodies national decline, the combined knowledge of the masses that dwarfs that of the pundit class is signaling something quite different: the “onrushing, dangerous future” that pundits can always be counted on to promote is anything but. While pundits seemingly yearning for a crisis (crises feed the punditry) claim that what happens in Ukraine, Taiwan/China, and with entitlements calls for serious candidates at the top of each ticket, voters apparently disagree.
Regarding Russia, is a country with an economy smaller than Italy’s and with a military that’s apparently struggling in Ukraine an expansionary threat to the world? Unless Modern Monetary Theory on the left or Neo-Austrian Theory on the right (both schools of thought claim against all reason that printing presses enable unlimited spending) represent rational thinking, Russia lacks the economy to even be a threat to its neighbors, let alone the whole world.
As for China, it most certainly can claim an economy quite a bit larger and dynamic than Italy’s, or Russia’s, but that dynamism is rooted in a gargantuan American appetite for its plenty, along with a similarly gargantuan U.S. investor appetite for China’s dynamism. In other words, if China pursues a war with the U.S. vis-à-vis Taiwan, its economy will collapse.
Thinking about entitlements, the pundits tell us (and have been telling us for decades) that Social Security and Medicare are “unsustainable,” and that a brutal, market-shaking reckoning awaits. Really? U.S. Treasuries are the most owned income stream and asset in the world, by far, and amid soaring U.S. debt since the 1980s the value of Treasuries has continued powerfully upward. In other words, and without defending the creation of Social Security and Medicare for even a second, the markets indicate we’re on much sounder debt footing in 2024 than we were when the national debt was $900 billion in 1980.
Considering the stock markets more broadly, few would disagree that they’re a look into the future and that they’ve been pricing Trump vs. Biden (or Trump vs. ?) for quite some time, and the reaction has been pretty bullish. This isn’t to say things won’t change in the weeks and months ahead, but as of now non-ideological and non-partisan markets give off the feeling of sanguinity about the men vying for the presidency.
Which is saying something. The experts tell us it’s a time of overwhelming peril, but the masses have settled on Donald Trump vs. Joe Biden, meaning the markets are telling us the experts are wrong. Who are you going to believe?
Republished from RealClear Markets