the morning after the insurrection

Yesterday a mob organized and incited by Trump broke into the Capitol in Washington with the supposed aim of somehow compelling Congress to overturn the results of the November election and declare Trump the winner. Trump’s earlier efforts to achieve the same goal, through 60+ lawsuits and arm-twisting legislatures in battleground states, had all failed to establish anything other than that the original outcome was examined again in detail and found to be correct–a victory for Biden of the same magnitude as Trump’s defeat of Hillary four years ago.

My question: what did Trump think he had to gain from the assault? I can understand the bogus fraud claim. It was/is a fund-raising scam in which supporters send him money to “fight the steal,” while not noticing the fine print in the solicitation reveals the lion’s share of the funds go into Trump’s PAC for his future use instead. He also had graduates of elite universities and law schools like Cruz and Hawley already eager to inject his craziness into Congressional debate. Trump clearly wanted the disruption that occurred, since he refused both to try to defuse the situation and to send law enforcement support to outnumbered police on the scene (Pence did the second).

On Wall Street, home to many wealthy Trump supporters, the reaction, as far as I can see, is embarrassed silence.

The reaction of the stock market, in contrast, is relief. The focus is on the fact that Trump’s attempt to subvert the election and remain in office has lost most of its support and that Biden will be president in two weeks. At the very least this means that after close to a year and what will likely be 400,000+ US deaths from the pandemic, Washington will finally begin to fight it rather than spread it. It also means the 30% or so that Trump’s looney-tunes economic policies have clipped off the GDP growth rate will begin to be restored.

The main thrust of today’s trading so far, though, has been on the surprising double Democratic senate win in Georgia. To the market, this implies higher deficit spending from Congress, which implies higher interest rates–which is good for bank profits.

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