And so it ends

Petulant, defiant, Donald Trump is scheduled to board a helo at the White House Wednesday morning and depart for his Florida mansion. He’s snubbing Biden’s inauguration. But the veep will be there – the guy who at the 11th hour stood up to the President and called out his election-fraud fiction even as protestors outside the Senate chamber where he stood chanted ‘Hang Mike.’ Mr. Pence grew a set.

So the era of the tweeting 45th commander-in-chief ends on a note few could have imagined. Trump has been impeached twice and stripped of his social media presence. He’s been shunned by most major corporations, abandoned by the PGA and faces both loan defaults and a possible indictment for fomenting insurrection on January 6th. His brand is sullied and, without much doubt, he leaves America more confused, divided, polarized, hostile and ungovernable than when he arrived. Plus there are almost 400,000 dead citizens in a pandemic he consistently downplayed by mocking public health measures like mask-wearing.

But wait. His disciples say the Trump years brought economic renaissance, record markets and prosperity. No way Biden can duplicate that. In fact in recent months he warned of “a depression the likes of which you have never seen” if he failed to win re-election.

Said Trump in Lansing, Michigan in the final days of the campaign he lost by seven million votes: “This election is a choice between a Trump super recovery or a Biden depression. That’s what you are going to have with the raise of taxes, the biggest tax increase in our history. It’s ridiculous. It’s a choice between a Trump boom or a Biden lockdown. Let’s lock it all down, and by the way speaking of lockdowns, let’s get your governor to open it up. Let’s get them to open it up.”

This is important to your B&D portfolio, your TFSA, RRSP and your kid’s education savings plan because how goes America, so go your investments. The Trumpers (and they are still legion, and pissed) insist the US economy flourished under Trump because he dropped corporate taxes, ignited a trade war with China, brought in protectionist policies, sliced immigration, ignited inflation and growth while creating oodles of jobs.

Some of that is quite true. A balanced and diversified, 60/40 portfolio in 2019 did great – up more than 15% as stock markets hit a high note before between whipsawed by the virus. The American unemployment rate dropped below 4% for a while, then soared in 2020.

By the way, here’s a comparison of how equity markets did under Trump, his predecessor and George W. Bush. After four years on the job, Obama’s track record was substantially better as he presided over the recovery from the credit crisis.

Markets liked Trump, but Obama even more

And what about jobs?

Trump was elected with the help of workers in the Rust Belt states after manufacturing was decimated and jobs moved offshore as corporations tried to lower costs and abandon high-wage America. For a while it worked. Until it didn’t. The pandemic has raged in the US more viciously than in most of the world. With just 4% of global population, it has suffered a fifth of all global deaths. Ten million fewer people are working than a year ago, and the latest jobless claims have spiked again. Recovery from Covid has sputtered in recent months, and doubtlessly the rage and frustration of economic defeat helped fuel the ‘attack of the patriots’ in Washington on 1/6.

Here’s the Trump record on unemployment.

So what now?

Trump warned Biden was a leftie, a taxer, a socialist and besides being ‘sleepy’ with dementia would destroy the economy. The new president’s first economic act came last Tuesday night when he promised a $1.9 trillion Covid stimulus bill to direct-pay American citizens, fast-track vax inoculations and support state and local governments. The odds of this passing through Congress are high, now that Dems control both houses. At the same time the Fed. America’s central bank, last week promised interest rates will stay in the ditch and quantitative easing continue.

The reality is that Biden is a centrist, with a five-decade record supporting that. He proved that again during with years with Obama. Biden is boring. Right now, boring is good.

But will he raise corporate taxes as promised during the campaign? Yup, no doubt. That will impact corporate earnings and maybe chop P/E ratios, tempering equity markets. But at the same time inoculating 100 million people in a hundred days will start to eliminate the single-greatest economic destroyer in modern history. There is no other way of getting the airplanes flying again, the hotels full, the stadiums teeming or the restaurants buzzing. Trump’s key failure was to consider the virus an enemy instead of a challenge. He denied it when he should have been mobilizing against it. He leaves anti-maskers, anti-vaxers, Covid deniers, China haters and mobs in his wake.

Time will tell how narrowly we escaped the full impact of this man. If at all.