On Sunday, famous Wall Street investment firm Raymond James discussed the minefield that is our current political environment. In their statement, the company acknowledged that the idea of President Trump resigning was a long shot. However, if that unlikely event did occur, they had some interesting ideas about what would happen next.
If indeed Trump stepped down, Vice President Mike Pence would assume the presidency. And in that case, this move would stabilize the currently choppy financial markets. In a report, Raymond James wrote, “After the initial shock, we think the market rallies as Pence is a predictable, traditional, conservative choice.”
Greg Valliere, chief U.S. policy strategist at AGF Investments, seconds that motion. In an interview with CNN Business, Valliere stated:
The markets can live happily with Pence, on trade in particular…Pence would get along far better with the Chamber of Commerce and the free trade advocates. He’d shy away from tariffs.
It’s certainly not an unusual or irrational belief. Adding to his executive criticism, Valliere noted that “Trump has become so erratic and unpredictable that it’s annoying for the markets…Pence is a boring, conservative, pro-business Midwesterner.”
Admittedly, I can’t provide much of a counterargument to these specific points. Unlike other world leaders, President Trump lacks a filter. And that’s really caused unnecessary drama.
However, no one man is responsible for the markets or the broader economy. I wouldn’t fall into this age-old trip this time around, irrespective of the executive-level irrationality.
Failing Fundamentals, not Trump Is Responsible for Market Chop
Although the President offers an easy scape goat for the present market volatility, the reality is that underlying problems existed well before he took office. For instance, while Trump pressured the Federal Reserve to adopt a more aggressive monetary policy, “his success” in doing so is just a drop in the bucket.
As we all know, dollar devaluation has been occurring for decades, accelerating when we went off the gold standard. Is Trump responsible for that? Hardly. In fact, prior to his 2016 electoral victory, he advocated for gold investments.
Moreover, our foreign policy, particularly the Middle East, was well established prior to him assuming the Oval Office. Sure, Trump must take responsibility for his own shortcomings in this regard, particularly the ill-advised Syria pullout. Nevertheless, this mess was also decades in the making.
Therefore, I see this latest criticism as nothing more than sour grapes. While Trump could do things that are more productive for the markets, he didn’t start this fire.