© Getty Images
The S&P 500 set a record Wednesday for the longest bull market in history, an upswing that began in March 9, 2009 — 3,453 days ago.
It’s a mark that the Trump administration is touting as part of its midterm election pitch, but one liberals say should be credited more to President Obama, who they argue rescued the economy from the Great Recession.
“The evidence in support of President Trump’s economic agenda is stacking up: wages are rising, GDP growth cleared 4 percent last quarter, and unemployment recently fell to its lowest rate in decades,” the White House said in a release commenting on the record stock run.
Democrats say 83 percent of the market gains came during Obama’s watch.
“It was President Obama and his team that got the fundamentals in place,” countered Andy Green, managing director of economic policy at Center for American Progress, a liberal think tank.
Others say presidents generally get too much credit and blame for market fluctuations.
“Quite frankly, a lot of it has had to do with monetary policy and what the federal reserve has done with interest rates,” notes Jeff Mills, co-chief investment strategist at PNC Financial Services Group.
The S&P index has gone up 320 percent, from the high 600s to a close of 2,861 on Wednesday. The Dow Jones Industrial average has risen from just over 6,500 to a peak of over 26,000. It closed Wednesday at 25,733.
The growth has bolstered the rich and helped strengthen retirement funds for millions of households. But the gains are far from uniformly distributed — a fact that may be giving steam to the populism that was a factor in Trump’s White House run and that has also bolstered liberals such as Sen. Bernie Sanders (I-Vt.).
Some 84 percent of the stock market’s value is owned by people in the wealthiest ten percent of the economy, according to research by economist Edward N. Wolff.
“Wages are still stagnant, the debt needed to buy a home or send your kid to college, or even afford your medical bills is enormous. The stock market gives you a sense that someone is doing well in this economy, but it might not necessarily be me or my community,” said Green
The streak for the S&P has now surpassed the dot-com boom of the 1990s, which saw a 3,452-day period of growth.
Though the market has fallen on numerous occasions over the past nine years, none of the drops reached 20 percent, which is what stock-watchers consider a bear market.
Republicans are seeking to use the economy to survive in a difficult midterm election season.
Trump’s approval numbers are low, and the president’s party typically loses seats in his first midterm election.
The strong economy, also reflected in 4.1 percent growth in the second quarter and an unemployment rate dipping below 4 percent, should help the party in power.
“All of the economic data are friendly to the president and the Republican Party, and that’s the most significant tailwind for Republicans running,” says Mark Zandi, chief economist at Moody’s Analytics.
But it’s far from clear that will be the case in the politically polarized Trump era.
Research by Alan Abramowitz, a political scientist at Emory University, found that a bad economy can doom an incumbent party at the polls. When the economic news is good, presidential approval has a far greater impact on voting.
Even with all the good economic headlines, the latest Real Clear Politics polling average shows Trump’s approval ratings are 12 percentage points underwater, despite the good economic news. Democrats lead Republicans on the generic ballot by several points in various surveys.
How long the bull market will last is anyone’s guess.
Analysts say the buoyant economy is unlikely to change before November,
But the parties could see a different economic picture during the next White House contest in 2020.
“There’s a high probability that between now and November 2020 the market will suffer a significant correction or even a bear market,” said Moody’s Zandi.
By then, he said, the deficit-funded fiscal stimulus provided by the GOP tax law and the bipartisan agreement to boost spending will start to peter out, and the Federal Reserve will have continued raising interest rates to battle an overheating economy.
“I think the economy is going to go from being a significant tailwind for Republicans in the midterms to a significant headwind in 2020. I think the economy is on borrowed time,” Zandi said.
Both parties are putting the economy in their midterm messages.
On Wednesday, House Minority Leader Nancy Pelosi (D-Calif.) sent out a “Dear Colleague” letter to her caucus, urging them to keep their focus on the economy.
“As November rapidly approaches, we must also stay focused on delivering our strong economic message to hard-working families across America that we are fighting For The People: working to lower health care costs and prescription drug prices, increasing workers’ pay through strong economic growth by rebuilding America, and cleaning up corruption to make Washington work,” she wrote.