It’s the Economy, Stupid

Economics is a complicated area of study. My college grade in Macro is proof. Many things in economics are intertwined. An easy example is when interest rates go up not as many people build houses on spec. If people are not building as many house the demand for lumber goes down. When the demand goes down so does the price. When the price goes down so does the need for more workers in the lumber industry. When those workers get laid off they can’t buy new things like cars.

So the demand for cars goes down. So there is less need for steel to build new cars and fewer workers needed to make steel or build cars. So those people get laid off. So they can’t afford to go on vacation. So there are fewer people flying. So airlines make less money. When all these industries make less money their stocks go down.

I know that is a simplified example, but we are all interconnected economically. So when the government slashes jobs the government is not just saving money on what it paid those workers. Because those workers spent money and paid taxes that keep the economy working.

When we cut Snap benefits, which you might know as Food stamps, then children go to school hungry, and hungry children do not learn. But it’s not just about hunger, it’s also about the economy. When someone spends snap benefits, they do it at a local store. Thanks to those snap benefits the store make more profit, and pays more employees, who then spend their pay check in the local economy and pay taxes. All that money moving through the economy is what helps America grow and makes the stock market go up.

Uncertainty is what makes the stock market go down. In less than two months Trump has enacted policies that have affected the stock market in the most negative way of any newly elected president.

I know that many people voted for him because they thought he would be better for the economy. Are you better off today? If so, how?