The February 2018 inventory market correction was painful to observe, however the information media exaggerated the state of affairs — piling on panic and blame with descriptions like “crash” and “freefall” — after ignoring most earlier data.
One frequent goal of liberal media assault was the GOP-handed tax-minimize regulation. Yahoo Finance columnist Rick Newman wrote on Feb. 6, that the “tax cuts are looking hollow right now.” CNN Money requested in a headline the identical day, “Are Trump’s tax cuts backfiring on Wall Street?”
The complicated declare repeated by the liberal media was that the financial system “is doing too well too quickly.” Rather than level out the strong “fundamentals” of the general financial system, the main focus was on “fundamentals to fear,” as one New York Times weblog put it. That weblog stated there have been worries “that the already strong economy may overheat” driving up inflation and resulting in aggressive rate of interest hikes.
Similar complaints concerning the tax invoice have been made by ABC World News Tonight in addition to the Los Angeles Times, and Washington Post between Feb. 2, when the Dow dropped by 665 factors and the tumultuous week that adopted.
Following a Dow drop off greater than 1,000 factors on Feb. eight, ABC World News Tonight correspondent Linzie Janis linked the market woes to the Trump tax cuts.
“Tonight, some economists also say the president’s tax cuts could actually be adding to all of this, by stimulating an already improving economy,” stated stated. Janis additionally requested, “who pays for those cuts later on?”
Los Angeles Times enterprise author Jim Puzzanghera took Trump’s analogy of the tax cuts being “rocket fuel” for the financial system, and stated “Rockets can accidentally explode.”
In his article complaining concerning the potential to “overheat” the financial system, Puzzanghera wrote that “Some analysts believe the extra stimulus of the tax cuts, which will boost wage growth and government borrowing in an already strong economy, helped ignore the recent stock market volatility that continued Tuesday with another wild session on Wall Street.”
While admitting tax cuts “are still likely to boost profits,” Newman argued “markets are now factoring in some of the problems associated with tax cuts that Trump and his fellow Republicans never mentioned, and perhaps didn’t even recognize.”
Even after saying “it’s hard, bordering on impossible, to pinpoint why markets rise or fall abruptly,” Newman of Yahoo Finance claimed that have been “plenty of clues” and the Trump tax cuts “are one of the suspects.”
But not all economists seen stronger development or rates of interest hikes as a foul factor. Brian Wesbury of First Trust Advisors wrote concerning the inventory market “correction,” on Feb. 9.
“Corrections scare the snot out of people. For many, who thought markets only go up, they feel like the end of the world. This is especially true when pundits start trying to explain the drop in stock prices by arguing that there are fundamental problems with the economy. This time is no different. But, in our opinion, this is an emotional correction, not a fundamental one. The US is not entering a recession, and higher interest rates over the next few years do not spell doom for the economy or markets,” Wesbury wrote.
In his view, the financial system goes to develop “because of better policy,” and “This is a good thing!”
But views like that weren’t so prevalent within the liberal media which was additionally towards the tax cuts even earlier than they have been handed. For instance, the published networks principally ignored firm bulletins of bonuses and wage hikes after the passage of the tax invoice, however additionally they made many extra explicitly unfavourable statements about tax reform because the laws was being crafted and debated in late 2017 than explicitly optimistic ones.