Economic Populism, the Movement of Money

Populism is Alive

Populism is alive and well and shows no sign of going away soon. In this past election we have seen both sides, the conservative Alt-Right side and the liberal Progressive side.

Economic Populism

From an economic standpoint it is about the back pressure to the movement of money to capital rather than movement of money to labor. This started with Reagan in 1980. The measurement one can use to see this movement is stock market gains vs real wage gains in percentage terms over this period. What analysis reveals is that the stock market has shown huge percentage gains over this 36 year period and real wage gains for labor have been stagnant.

Trump’s Victory

Trumps victory represents one side of this populism, one that has quickly morphed into social issues, like health care, immigration, and people’s rights, mixed with the Trickle Down Economic Theory that started the current inequality issue. The Democratic party missed out on capturing this Economic issue because the DNC and Clinton got mired in old Politics. The result is that they didn’t provide a candidate to capture this wave.

Is Trump Populism Genuine?

So bottom line, if Trump style populism is really successful in increasing real wage gains, it can be deduced that the secular move of huge gains in stocks will be hitting head winds. To date the stock market acts as though it does not believe that Trump’s populism is genuine , but it is early in the process.