By Victor Davis Hanson, The Daily Signal | April 09, 2025
Hello, this is Victor Davis Hanson for The Daily Signal, speaking on a Monday that the market’s gone down 300 points. It’s about where we were two years ago, January of 2023.
Remember, the market, in the last two administrations, eight years, has doubled in value. So, it’s not like this big collapse. But more importantly, is this panic we’re watching on Wall Street based on hard data or evidence or experience?
What do I mean by that? First term, President Donald Trump, was he an enemy of Wall Street? Is there a better alternative? Did he crash the market? No. The market grew 65% under Donald Trump. He basically repealed what Wall Street hated most, the Dodd-Frank oversight act. He deregulated, he cut taxes, he simplified. He stood up for American companies and their disputes overseas. They loved him.
Is it based on data that we’ve seen so far in his first 80 days? Unemployment? No, actually, the job report came 100,000 jobs more than the government itself had predicted in March. Maybe it’s inflation. It’s gotta be inflation. The Fed, the Fed. No. The inflation rate, as it annualized in March, fell to about 2.6%. It was very—2.6% for the year.
Maybe it’s based on other things he’s done that are chaotic. No, there were 10,000 people crossing the border. He said he was gonna stop it. Former President Joe Biden said you had to have comprehensive immigration reform or it was impossible. There’s zero. It’s almost statistically insignificant. There’s nobody crossing. He did that in 80 days.
Maybe abroad, Donald Trump, he’s as reckless with the crate as he was abroad. No. The Red Sea, for the first time in four years, is navigable. The Houthis are emasculated. They’re descending to the status of Hezbollah and Hamas. The octopus itself in Tehran is terrified. They’re sending back-channel messages to Trump to negotiate so they don’t lose their nuclear plans. In other words, it’s pretty stable.
How about Ukraine? No. Donald Trump is not doing what Joe Biden said: We’re gonna go as long as it takes. He’s trying to find a ceasefire. We are closer now to stopping this 1.5 million dead, wounded, missing, killed, Stalingrad than we’ve been in three years.
So, if it’s not based on data points and it’s not based on what you could infer from his first term and it’s not based on his agenda in other areas or the world scene, what is it based on it? It’s based on panic. It really is.
It’s based on what we saw in 1929. It’s what we saw in 2008, where Wall Street goes into a fit of hysteria. Part of it is fed by left-wing street theater, media hysterics, which they feel will help their counterparts, their soul mates in Europe, so they can put pressure on Donald Trump.
To end, I wanna finish with just two considerations. They’re very important. Ten percent of Americans, the elite, they own somewhere between 88% and 93% of the market value in the stock market. Think of that. So, what we’re talking about is the mass hysteria of investors, of academics, of media, of lawyers, of wealthy people, the professional classes.
In contrast, 50% of Americans—160, 170 million people—they have 1% of market capitalization. Their wages only went up 35%. Not doubled, like the stock market did, over the last two. It was a good rise. It was impressive. But if the stock market had gone up 35% instead of doubled and wages had gone up a hundred, then you might see them a little bit more interested.
Another final consideration, Donald Trump sold this trade readjustment on reciprocity. Indeed, 70 countries are now willing to negotiate. For this first round, he’s got to keep to that.
If there’s a country like Israel or Australia that either has similar tariffs to our own or is running a deficit with us and this first round he should let them go. And if a country says, “We want no tariffs and we’ll match you zero to zero,” he should take it.
Now, you’re gonna say, finally, “Victor, they have excise taxes. They put phony security and health regulations to intentionally block American imports. And that is a tariff of sorts. They use money manipulation.” I know all that. But that’s for Round 2.
Right now, at this moment in time and space, it’s very important to keep people on your side. And the only way you’re going to do that is reciprocity, equality. Whatever they do, we do. Parity.
We can work out all of the hidden machinations our trading partners use under the word “safety,” “health,” “tax,” “value added.” That doesn’t matter. Right now, he’s got to at least say in Round 1, “If you don’t have a tariff on us, we won’t have a tariff on you.” And he’ll get his $300 to $400 billion anyway from the countries that resist.
Victor Davis Hanson, a senior contributor for The Daily Signal, is a classicist and historian at the Hoover Institution at Stanford University and host of "The Victor Davis Hanson Show."
Original article link
