Anyway, let's head on over to Bloomberg, or something, while I take a comically large swig of my morning coffee, and...
;alsijgfa;oiejf;oaijfn;oijv;eronifvu;eoriugv;aidfjv g'alidsjf
[BZZT!]
Fuck. Tech support!
Anyway, so... that happened. First, general rule-- ignore the Dow. That's the big number. It's based on 30 stocks. The S&P 500 is based on... 500 stocks. More stocks means it gives you a better picture of where things are. The S&P 500 has, over the last couple of days, dropped from near 2900 to 2728. That's ugly.
What does that mean? It means that, if you have stocks, a retirement account, or something like that, you probably damaged your keyboard at some point recently, but that's the least of what you lost. Beyond that, who knows? As Paul Samuelson famously said, the stock market has forecast 9 of the last 5 recessions.
And that's the topic of today's note.
Donald Trump, you may have observed, is one lucky motherfucker. He may want more. OK, he does want more. Like, that's not the family member he wants, creep that he is, but he is really lucky. He was born, not just really rich, but to a father who started illegally channeling money to him through business and tax schemes before he could properly pronounce the racist slurs he was undoubtedly hurling at the nannies changing his diapers. Everything has been handed to him on a silver platter, and even when he failed as a businessman, because he's really stupid, daddy's money made sure that he stayed rich.
A combination of factors brought him to the presidency, and in the general election, despite the Access Hollywood tape, James Comey made sure that Hillary Clinton lost, meaning Trump's victory. Trump's luck continued. Again, that's not Trump. From his perspective, that's just dumb fucking luck.
As President, he inherited an economy that has been growing at a rather healthy rate. Since the depths of the "Great Recession," we have experienced steady GDP growth, slowly but steadily declining unemployment, consistently low inflation, and a stock market that just keeps climbing. All of those trends date back to 2009. Giving Trump credit for trends that date back 8 years before he took office would be as stupid as giving him credit for the wealth he inherited from the father who accumulated it.
In other words, it's the kind of stupidity that one expects from the rubes who support him. Data junkies like me see through his shit because we prefer facts to lies.
And here are some more facts. Most incumbent presidents are reelected. Is that because they are good at their jobs, and deserve to be re-hired? Note my terminology. I wrote a book about our conceptualizations of elections, as hiring processes. Or, is that just dumb luck? When the economy grows, incumbents are reelected. When it shrinks, they tend to lose.
Most of the time, the economy grows. Why? Because capitalism works.
What happens if a president hits reelection when bad things happen? They lose. That can happen in one of two ways: dumb luck, or their own ineptitude.
Trump is really, really lucky. But, he's also really, really incompetent.
Luck is... what the fuck is luck? It is a term we impose on observations that seem to fit a pattern that defies explanation, like drawing into an inside straight. That's luck, but that's not really a thing. It's randomness, onto which we impose a term because that's something humans do. There are over 300,000,000 people in this country. By the numbers, some of them will have lots of good shit happen to them through nothing of their own doing, just as some of them will have lots of bad shit happen to them through nothing of their own doing. Luck is the term we use to describe this statistical inevitability that exists without our attention to the bigger picture.
The gambler's fallacy is treating one observation as being related to the previous observation when they are independent events. You've had bad hands, so you are due for a good hand. Trump has had good luck, so he is due for bad luck. Luck isn't really a thing. Trump's incompetence is.
And that brings me back to the stock market. What happened? Who the hell knows? A market correction? A global reaction to the idiot Mercantilist-in-Chief's stupid, fucking trade war? Some computer programs bouncing trades off of each other and creating a selloff due to an algorithmic glitch? Interpreting short-term market events is a mug's game.
However, there is a strong possibility that Trump's "luck," economically, does run out. Recessions happen. Period. 2018? Too late for that. The Senate stays GOP, and that means more rapists in robes. Easier access that way. 2020? Statistically, most presidents are reelected, but "shit happens" is almost a law of politics, and incompetence means an inability to wipe your own ass, much less the country's.
Luck. Is it really a thing? If you think so, then try to measure yours, scientifically, and then make bets on it. I dare you.
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