We Are All Keynesians Now

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The Wall Street Journal reports that investors are giddy at the possibility of Republicans finally embracing crude Keynesian stimulus. Isn’t that funny? Republicans have been screaming about government spending for the past eight years, but investors are now pretty sure they’ll happily blow a great big hole in the deficit. I wonder what changed their minds?

Of course, there’s more to Wall Street’s happiness than just that. Thanks to newfound hopes of government spending, bank deregulation, and fat profits for Big Pharma, the stock market hit record highs today:

The moves partly reflected expectations that a Trump administration would push to scale back financial regulation and increase government spending in a bid to boost economic growth….Thursday’s gains came as the president-elect’s transition team promised to dismantle the Dodd-Frank law, regulation that came out of the financial crisis….Pharmaceutical companies also jumped, with some analysts and investors saying drug-pricing restrictions would have been more likely under Democrat Hillary Clinton. Health-care companies had sold off sharply heading into the election.

JP Morgan Chase and Goldman Sachs were big winners today. And bonds are doing well on expectations of higher inflation under Trump. This is all certainly good news for rich people, but I wonder what Trump has in mind for all those rural working-class whites in Michigan and Wisconsin who put him over the top? Oddly, Wall Street doesn’t seem too worried that he’ll do anything at all for them.

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