Investors really don't like uncertainty. At all.The Small Business Optimism Index hit an all-time high. That’s the new Presidential Approval Poll.
In olden days (pre-2016), candidates for president were not so different from each other. I can remember pundits complaining endlessly about how similar the Democrats and Republicans had become. In that environment, you can easily imagine someone who voted for Candidate A warming up to Candidate B. In those simpler times, a presidential approval poll meant something.
Today, a “presidential approval poll” is little more than taking attendance. If you’re a Democrat, you disapprove of President Trump as a lifestyle choice. If you voted for Trump, you probably still approve of him because you knew exactly what you were getting. And if you are an anti-Trump conservative, you allow cognitive dissonance to rule your brain and you say he’s doing a good job but you disapprove of him anyway. David Brooks accidentally described this phenomenon in this article.
I contend that business optimism — and small business optimism in particular — are the new standard for presidential approval because “economics” captures most of what a president influences.
If a president starts a war, or threatens to start one, the economy flinches.
If a president starts a trade war, or threatens one, the economy flinches.
If a president is tearing apart the fabric of civilization in one way or another, the economy collapses.
If a big terror attack succeeds on the homeland, the economy flinches.
If immigration is allowed in large numbers, the economy feels it.
I could go on. The point is that all of the “big” issues directly influence the economy via their impact on our psychology and our resources. In a free, capitalist country, “the economy” captures all the goodness and badness of a presidency without really trying. And the measure that best reflects the future of the economy, in my opinion, is small business optimism.
What we are seeing currently is just a hint of what could be happening for Americans. Just a fraction of a hint. If we could truly be free of Obamacare and state-centered regulation, and a million other externality-laden bad ideas, it is inconceivable how well our people, top to bottom, would be doing.
Adams, of course, has interesting thoughts.
It's going to take a lot to smash the Gibs machine AND the War machine; a whiff of prosperity and the rewards of being allowed to keep the fruits of one's labor should have a positive effect in the right direction, at least.
