This is the 10th presidential election of my adult life and the 5th election during my career. A byproduct of studying history and being a Financial Advisor has led me to be a consumer of political news. I tell myself it is “for work” but I must enjoy it on some level. Over each of these election cycles, clients ask me what I think is going to happen next. Isn’t this person going to be bad? Do we need to change our strategy because taxes are going to go up? So and so is going to crash the economy, and so on. People of all political stripes have told me how crazy this year seems and with everything we have gone through this year, it feels about right.
The reality is that Presidents wield very little power when it comes to how the economy performs. Economic policies that they do enact often take two or three years to begin to show both the desired effect and the unintended consequences. They get to take credit when the economy does well and get blamed when there is a recession but by and large, monetary policy and the business cycle have the greatest impact on both Wall Street and Main Street. This line of thinking in the modern era dates back to the market crash of 1929 and the resulting Great Depression followed by the immense amount of government action taken by the FDR administration starting in 1933. Ninety years and counting later, economic historians are starting to debate the necessity of that kind of stimulus as well as the long term effects of the power of Central Banks on the world economy. Regardless of whether you think New Deal programs were good or bad, they are now a fixture in our politics and therefore have crept into a “conventional wisdom” narrative that we repeat every four years.
There is a constant push and pull in our history as a nation to live up to ideals written in the Declaration of Independence, the Constitution, and how we see ourselves today. We have participated in this idealogical ‘tug of war’ since the founding of our nation. If there is one word that has become used too much in 2020, it is “unprecedented.” While we are a nation divided, we have been since our founding. The wonder of America is that we continue to find ways to bridge these divides, often imperfectly and through half measures.
I am addressing this primarily to reassure you that regardless of who wins this year’s election, we will continue with this push and pull. I continue to have a large degree of optimism that we share more in common than our social media feeds would indicate. There is no doubt that our country and the world faces challenges in dealing with how to navigate through COVID-19 and the policies and rhetoric around this are important. There is absolutely a disconnect between Wall Street and Main Street (there almost always is) but we continue to see signs of life region by region as mom and pop businesses find ways to innovate and even grow. Conversely, there are still too many industries and communities that are disproportionately affected. Make no mistake, I do believe the next few years are going to be challenging. We should expect market volatility but we should also be prepared for opportunities as we take the skills we have learned this year and apply them to the wider world around us. I firmly believe our best days are always ahead of us.