Rick Rosner: Before the stock market even opened, I reminded people that Trump owned most of the 20 worst point drops, percentage drops, and one-day drops in the history of the Dow Jones. This inspired lots of back-and-forth between liberals and MAGAs. But the whole story is this: the stock market did pretty well during the first three years of Trump’s presidency. He had 126 all-time highs on the Dow.

And the stock market liked him because he was giving tax cuts to corporations and rich people and cutting regulations. Then, when faced with an actual challenge with COVID in 2020, he botched it because he’s a moron. That crashed the market, leaving him the first president since Hoover 90 years ago to leave office with net job losses. There was a stock market crash in 2020, but it was fairly brief. It took Biden a couple of years to help cure the economy after Trump left it in ruins. He disrupted supply chains. COVID disrupted supply chains, leading to inflation and giving companies the excuse to jack up prices for record profits. So I had a more comprehensive picture of everything.

Well, except that it’s a measure of how bad a president is. I’m sorry to restate it. The number of years it takes to undo the damage done by the previous president is a measure of how bad that president was. According to presidential historians, Trump was the worst president in history. The economy is now reasonably healthy, with only 4.3 percent unemployment.

The Fed, after this really bad day in the Japanese markets where the Japanese market lost 14%, and the US markets lost 3%, will almost certainly cut interest rates in September. The good news is that the Fed has five percentage points of potential cuts to play with if that’s what it takes to stop the economy from going into recession. So there you go. Sorry, I’m tired, which wasn’t as coherent as I had hoped.

Scott Douglas Jacobsen: Did you mention how it’s being called the “Kamala crash” by Trump?

Rosner: Yes, that’s what my first tweet was about. It was a “fuck you” to everybody who was cheering for a huge crash to make Biden and Harris look bad, which is exactly what Trump is doing. Then I was accused of saying nobody’s doing that, and of course, Trump did exactly that. There’s not much of a crash here, at least as of yet. The Nikkei, the Japanese stock average, dropped 14% yesterday and another 6% on Friday and is up 9% right now.

So the US markets might bounce back a percent. Markets losing 3% is not a crash. The only market in correction is the NASDAQ. Correction means it is down 10% from an all-time high. If it bounces back a percent today, which it may or may not, even the NASDAQ will not be in correction, but we’ll see. So it’s not a crash. The good news is that the Fed has all these percentage points and quarter points they can cut to help us avoid a recession.

The way that works is to cool down the market by raising interest rates, the rates that the Treasury and banks pay on investments. You can now buy a money market account that pays 5%. So, if you can get 5% risk-free, many people want to avoid investing in stocks. Every time you cut that rate, the prime rate, by a quarter percent, a certain number of investors will decide they don’t want the safe investment anymore because they can’t make as much, and it makes stocks more valuable as investments because they’re riskier but now they pay more relative to the safe investment.

For the first time in history, after the 2008 Great Recession, interest rates were at 0% for years. Then, to cool down the economy, the Fed raised the prime to 5.5%, which means they have more than 20 quarter-point cuts they can make if they need to pull the US out of a potential recession.

Rick Rosner, American Comedy Writer, www.rickrosner.org

Scott Douglas Jacobsen, Independent Journalist, www.in-sightpublishing.com

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