Dems see bad news for Clinton in market plunge

Dems see bad news for Clinton in market plunge
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Plunging stock markets are rattling Democrats, who worry Monday’s 588-point drop in the Dow Jones could be a precursor to a souring economy.

That would be bad news for the 2016 Democratic presidential nominee, particularly if it is Hillary ClintonHillary Diane Rodham ClintonHillicon Valley: Facebook civil rights audit finds 'serious setbacks' | Facebook takes down Roger Stone-affiliated accounts, pages | State and local officials beg Congress for more elections funds OVERNIGHT ENERGY: Sanders-Biden climate task force calls for carbon-free power by 2035 | Park Police did not record radio transmissions during June 1 sweep of White House protesters | Court upholds protections for Yellowstone grizzly bears GOP Miami mayor does not commit to voting for Trump MORE, said Democratic strategists, who argued that Clinton would be saddled with incumbency as much as sitting Vice President Biden.

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“I hate to be so gloom and doom as a Democrat, but today I hate to tell you this is not good news for the Democratic Party,” said Democratic pollster Paul Maslin.

The economy is a long ways from the last stock market crash, when housing prices were also plummeting and the nation was shedding jobs.

The economy has been adding hundreds of thousands of jobs each month and an unemployment rate that was in double digits in 2010 has been cut nearly in half, to 5.3 percent.

Still, stocks are considered a leading economic indicator, and they are falling because of concerns about an economic slowdown in China — a country increasingly connected to the United States.

Maslin said he’s glad for his party that the market meltdown is happening now, and not in 2016. 

“Our only good fortune is that this is 2015, not 2016. You can imagine if this was happening a year from now it would be a huge help for [the Republicans],” he said.

Veteran Democratic strategist Joe Trippi sees the economy as a huge risk to a Clinton candidacy.

“The biggest thing I think that’s hanging out there is the potential for China, or some other force outside of U.S. economic policy, creating a global recession or an economic downturn somewhere between here and the election,” Trippi said.

A sinking economy is generally bad news for an incumbent party trying to hold onto the White House.

"It adds to economic unease and angst and so that tends to hurt the party in power and it’ll give a lot of the challengers, especially in the Republican Party, some campaign fodder," said Tony Fratto, a partner at Hamilton Place Strategies and former spokesman for President George W. Bush. 

But a bad run for the Dow, which has lost nearly 1,500 points since the beginning of last week, doesn’t necessarily signal a bad economy — even if it does make people worry about their 401K plans and retirements.

The stock market’s value rose spectacularly after the financial crisis of 2008-2009, for example, even as the underlying economy struggled.

In fact, some market analysts argued that Monday's sell-off was overdue, given the spectacular rise in stocks over the last several years. Those experts argue the decline is simply the market returning to more normal levels following that exuberant streak.

It is not at all clear if Monday's sell-off will continue in any substantial way going forward.

"I have always cautioned anybody in campaigns to be really careful about using the market closes as rhetorical tools," said Fratto. "Markets are fickle, they go up and they go down and then they go up again."

Some Democrats, however, are worried the economy is not as strong as others in their party think — and that this could be bad news for the Democratic nominee.

“I start from the premise that [the economy] wasn’t very good to begin with,” Maslin said. “The consumer confidence numbers have been shaky.”

When you examine public polls, he said, “the overall sense with the public is that for substantial parts [of the population] the recovery hasn’t really taken effect.

“It’s politics 101 that it’s the incumbent party that’s always the one that bears the burden,” added Maslin, a longtime Democratic strategist who worked for Joe Biden in the 1980s and was the pollster on Howard Dean’s insurgent 2004 campaign.

Trippi and Maslin agree that the biggest beneficiaries of an economic downturn — at least in the short-term — would be the populist candidates whose campaigns are channeling voter anger. Bernie SandersBernie SandersTammy Duckworth is the epitome of the American Dream On The Money: Deficit rises to record .7 trillion amid pandemic: CBO | Democrats sidestep budget deal by seeking 0B in emergency spending | House panel advances spending bill with funding boost to IRS Biden-Sanders unity task force calls for Fed, US Postal Service consumer banking MORE on the left and Donald TrumpDonald John TrumpKimberly Guilfoyle reports being asymptomatic and 'feeling really pretty good' after COVID-19 diagnosis Biden says he will rejoin WHO on his first day in office Lincoln Project offers list of GOP senators who 'protect' Trump in new ad MORE on the right have both railed against free trade agreements, lobbyist cronyism and the permanent political class.

And Trump was quick to criticize the Obama administration for Monday’s market woes, which he linked to China and Asia. “Vote Trump,” he concluded.

Peter Schroeder contributed to this story, which was updated at 8:27 a.m.