Does GOP Even Care About Wall Street?

Dow Jones

I guess we will need to watch the Dow Jones Industrial Average (DJIA) for the next couple of days. The first thing this morning, it dropped about 70 points and has pretty much stayed there for until now. In a fundamental sense, the DJIA doesn’t mean much. But in this case, it is a gauge of how nervous the bankers are. Clearly, they aren’t freaking out. Yet. But the federal government will hit the Debt Ceiling on Thursday, and I fully expect if we don’t hear some hopeful news as the day progresses, tomorrow we will see some very bad numbers. And Wednesday would be even worse.

Right now, I suspect the relative calm will last for a bit. The bankers are doing what we are all doing: waiting and watching. All of us are cautiously optimistic. After all, the Congress has always managed to raise the Debt Ceiling before. And especially with the last two Congresses, we’ve gotten used to last minute deals. But I can’t help but believe that overall the government shutdown and especially the Debt Ceiling crises are depressing market enthusiasm—not that it is a bad thing.

On Friday, the DJIA was way up as it looked like a deal was near. The initial drop this morning was probably the result of dashed hopes over the weekend. Regardless of what happens, once these crises are resolved, the market will rebound, just as we saw on Friday. These people are looking for any reason to be optimistic.

But think about what the Republicans currently want: government spending cuts. These would be bad for the economy and although they wouldn’t have the kind of effect that a Debt Ceiling breach will have, they would hurt the market. But what the Democrats want is an end to the Sequester—in other words, government spending increases. These would be good for the economy and thus the market.

The real question is why the Republican brand is as the party of business. This is nonsense. What it is really is the party of the wealthy, many of whom own businesses. So what’s good for business is generally the Democratic policy. But most business owners are not rich. They are just getting by like everyone else. And like the rest of the non-wealthy citizens, their voices are hardly heard in Washington—especially by the Republican Party. This is why it will be interesting to watch Wall Street the next couple of days. If the Republicans won’t listen to them, I’m not sure what the party is anymore.

Afterword

Currently, the market is rallying a bit—down by about 30 points. Waiting and watching.

Update (14 October 2013 11:13 am)

Now the DJIA is up 50. So maybe they don’t care. But I am sure this will change if the crisis continues for two more days.

Update (14 October 2013 2:48 pm)

The DJIA finished up 65.15 points. Of course, the news in the Senate negotiations has been good throughout the day.

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About Frank Moraes

Frank Moraes is a freelance writer and editor online and in print. He is educated as a scientist with a PhD in Atmospheric Physics. He has worked in climate science, remote sensing, throughout the computer industry, and as a college physics instructor. Find out more at About Frank Moraes.

0 thoughts on “Does GOP Even Care About Wall Street?

  1. But you’re assuming the Republicans have any interest in the well-being of "business" as a sector of the economy. They don’t. Nor do they have any interest in "workers" or "families."

    Their goal, and their leadership has made this abundantly clear, is to transfer every last conceivable government-run function into private hands. Which will charge more, serve less, and make a chunky profit thereby.

    There’s no "compromise" for this; any remaining public entity is a waiting group of captive consumers yet unowned. Nothing about the modern GOP even resembles principle. This isn’t the band playing "Star-Spangled Banner" as the Titanic goes down. This is dynamiting a chunk of the hull, then making use of the chaos to pilfer deck chairs and lifeboats.

    I fear that, in the long run, they’re going to get away with it.

  2. @JMF – In a sense they already have. Who needs to win elections if you can simply constrain the options to a narrow area where you’re happy. And that’s what’s happened in the US over the last 30 years. But I don’t want to think about it right now. I’m already too depressed.

  3. @JMF – I didn’t know that, but I certainly have noticed that I don’t much see him around. He was once on [i]Up with Chris Hayes[/i] though.

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