Unfortunately, more people are currently concerned about the markets than they are about the economy. And my fear is that people will begin jumping ship through this pullback.
With each passing hour, it looks as though President Donald Trump will have a difficult time rounding up support for his agenda—not from Democrats, but from his own party. So maybe the question is not whether all this distraction will slow the legislative process. Perhaps the real question is: Will there be so much infighting among those who don’t want to appear to support the president with those who want a stronger America that the agenda goes nowhere—even if the legislative process continues?
Or maybe the process will be slowed down so much that we don’t even see a vote on any of the key agenda items, such as tax reform, infrastructure, and the repeal and replacement of Obamacare. This is exactly what is weighing on the U.S. and international markets right now. But it’s not time to panic—the agenda can progress even after a pause.
But I’m hoping the worst-case scenario will be just that—a pause. In other words, nothing may get done until next year. A best-case scenario would be that tax reform moves forward sooner rather than later, and that it remains a priority for this administration’s pro-growth agenda.
If you are a long-term investor, hang in there. If you’re in it for the short-term, which I never recommend, then pray for the best.
At what point should we be concerned? That will come when it looks as though the infighting, lack of unity and a do-nothing Congress continues to work to make sure nothing happens between now and the next election. If that is the position Congress takes, and if Republicans are convinced they need to adopt the narrative of the liberal, mainstream media—which would not surprise me—then all my optimism built up since the day after the election may be zapped.
From an economic and investment perspective, I find it extremely concerning to think we could be falling back into a hunker-down mentality. And it’s hard to believe we could possibly have four more years of a do-nothing Congress, no fiscal policy and nothing but continued resolutions—and expect the economy to survive.
All the enthusiasm and optimism that had bolstered the economy—and impacted the markets positively—could deflate in a very real way. This administration’s agenda that would build a stronger America, strengthen the middle class, create jobs and increase income, all of which could take us and future generations into prosperity, could soon be only a dream—never a reality.
All this means we could be at the mercy of the political landscape for a very long time, which will be detrimental to the markets, jobs and the economy—both in the U.S. and globally. As a matter fact, based on this scenario, we could assume that the global markets could actually perform better than America’s. Remember, the markets hate uncertainly, and American politics are the definition of uncertainty right now.
I believe that the Republican-controlled Senate, House and White House could possibly come to their senses and do what is necessary for a great America while they still have some control of all three. Maybe—just maybe—they’ll realize that, ultimately, they will be judged on the state of the economy and whether people make more money, have better jobs and see their children have an opportunity for prosperity.
This is a real possibility, and I wouldn’t be too quick to go anywhere near the hunker-down mentality yet. I am for holding steadfast. Let’s let the dust settle and pray that out of the dust we can find some real leadership.
But we must keep in mind that Washington is filled with naïve, misguided politicians—just in case you’re wondering why uncertainty rules the day.
Dan Celia is president and CEO of Financial Issues Stewardship Ministries, Inc., and host of the nationally syndicated radio and television program “Financial Issues,” heard daily on more than 630 stations across the country and reaching millions of households on the National Religious Broadcasters Network, BizTV, Dove-TV and others. Visit www.financialissues.org.