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WSJ Editorial Board Member Steve Moore on the market’s reaction to Obama’s re-election.
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Hurt earnings.
Are right now to our top story check with his -- line.
From the Atlantic -- -- this is the worst election for Wall Street in debt gains.
There hysterical it goes on to say that it's a combination of president didn't come -- Elizabeth Warren.
Alan Greece -- newly invigorated Democratic Party is making big -- is very nervous -- bank.
-- really in now much trouble her.
Just being spoiled sports with me now is Steve Moore.
Editorial board members senior economics writer at the Wall Street Journal welcome back Steve thank you well joining us great to be with you -- your -- -- so many books it was.
Yeah you this stop by ask that you have one that you can sort of hold up and and -- well we'll find one by the I -- Autographed copy -- I've got -- guess the fact that I sleep.
-- this I mean is this the worst election for Wall Street in the history of the U.
Correct kind of a conventional wisdom that you just repeated -- -- the drives me crazy.
Where people say other raise in the market market is cracked you know really drops -- to -- -- -- -- -- -- the worst two day session we had been.
You're salt and but this will grab what's changed.
From Monday is obviously we have the full -- so.
This kind of fits your theme that -- investigating night maybe this is a pretty bearish.
Outcome for the election where you had democratic pick up set for the in the -- -- Yeah that Republicans lost seats in the house and he got President Obama -- -- -- Congress so that you know quiet because -- -- -- ushered out as I -- you know if if my friend Austan Goolsbee who will works for.
Worked for -- about it or hear what he says when -- at America was up over 50% during -- and Obama's first term so I gotta get that out there to be fair.
Yes no absolutely backing the difference -- everybody went.
To the polls and they voted for their folks and they thought it was going to be all their folks when the dust settled.
You sort of looked at -- cast of -- -- that we've elected and it's the same crew.
That got us into this mess and brought us this close to the fiscal clip in the first place and everybody I looked around and let's have.
-- -- Well what -- you mentioned it's not just the numbers it's it's the Democrats were elected they're pretty.
Pretty radically liberal I mean you have -- I did Elizabeth Warren who -- gave that speech at the Democratic Convention against the ballot factors are well fed -- -- -- against Wall Street and the bankers who saw a lot body and that can't and to.
-- women in Wisconsin who's you know boost from Allison what do I have to -- I can't believe you have.
It more than that picture like G I mean she looks so happy she's so excited every kind of -- -- see as policies calendar right after Wall Street I mean.
Buckle up hide under your desk here she comes.
I'll look I don't I mean it if you just look at the list of things that she has done.
Just -- -- even that she was filibustered.
When that issue is trying to run for -- you you know why is -- her name is -- -- their for the consumer financial protection board and he's not -- -- now she's like Avnet now at this point -- be locked.
If that's what she was doing after that other Americans and other Republicans have to deal with -- -- colleague how to write an interesting situation.
But I think -- you know back to the subject about business the bus -- worst outcome for investors ended you know fifty years.
I think that the biggest danger right now.
Is -- is the increase in the capital gains and dividend rate -- with respect to investors I agree Melissa this is not complicated.
If if you raise the tax on capital gains and dividends -- the after tax rate of return on stocks.
False and that perhaps gonna get beat up -- in the market I think one of the reasons the markets follow increasing never the last two days -- Because nobody really knew a lot Monday night who was gonna win this election or amend a -- Tuesday night none of this was really fully priced into the market but now it's getting priced into the market.
It was so straightforward -- -- there -- people who asked me taxi drivers people on the street -- was sent to me.
You know what should I do should -- buying stocks if President Obama wins will the market go up and I would say.
Are you kidding because he said he's gonna raise taxes on dividends.
And an anti cap gains so by definition.
You're gonna buy fewer of those things because your return is lower so it did you know and -- treatments -- I mean it's not -- a value judgment.
But you know let's not forget I mean obviously that the committee -- thing that drives -- stock market is earnings.
And so ultimately you know -- earnings can grow even when you have presence or not not so very favorable.
Towards investors the other part of the equation -- says data is that as you know.
-- -- Obama has said very nice things about Ben Bernanke where is Mitt Romney.
Head basically set up -- fire that guy if I get elected -- this probably means.
A continuation of this kind of easy money policy and the one of the things that people might want to look at investing and if we get you know continuation.
Of these really low interest rates in this lot of money.
Is -- commodities like gold.
Yeah no that's a great went -- so at the end of the day yes or no best or worst.
Of the worst election for the stock market ever.
Ever know I would have to say that was probably -- -- hope Brazil I did 98 it to anybody you know this is not the ideal outcome but -- -- we have grown through.
Things like this before and who knows you know I thank -- much bigger -- may be Barack Obama will learn the lesson Melissa.
But his first term and maybe you'll actually govern from the -- a -- springs eternal yeah.
-- now.
All right my thanks -- Nevada hello about yes yes yeah we don't he I think that he's going to govern from the middle I can feel it thank you -- -- ask.
