Investors watched in dismay as global markets spiraled into chaos Monday, sending the Dow plummeting 1,000 points within several minutes of the opening bell.
But for some 2016 presidential candidates, the massive selloff was nothing short of a political opportunity.
In an election cycle that has so far been dominated by issues like immigration and foreign policy, the abrupt course correction on Wall Street brought sudden renewed focus on the health of the U.S. economy. Republican contenders — including those with business backgrounds like real estate mogul Donald Trump and former Hewlett-Packard CEO Carly Fiorina — seized on the volatility to go after President Barack Obama’s policies and push their economic agendas.
Trump, who is currently leading the Republican presidential field, was first to pounce. He said the enormous selloff was the result of the U.S. “allowing China and Asia to dictate the agenda.”
“As I have long stated, we are so tied in with China and Asia that their markets are now taking the U.S. market down,” Trump wrote on Twitter. “Get smart U.S.A.”
Fiorina, whose political star has been on the rise since a standout performance at the first GOP presidential debate, lamented that the “underlying fundamentals of the U.S. economy are not that strong.”
“Two percent growth is pretty lackluster. Of course, now we have the Fed Reserve backing off on zero interest rates and China’s economy is slowing,” she said on the Fox Business Network. “There’s no doubt that China has some real issues in front of it, and the devaluation of the yuan as well as the huge selloff in their markets spell trouble ahead.”
The recent turbulence in global markets is shining a spotlight on the economy, though the issue has not taken center stage in the 2016 cycle so far.
One reason for this is that the economy has made notable progress since the height of the 2008 financial crisis. The unemployment rate is now down at 5.3% and employers have added nearly 3 million jobs over the last year. Home prices are up, and the recent dip in oil prices is giving consumers more financial freedom.
It’s a significantly different landscape than four years ago, when Obama was struggling to bring down a stubbornly high unemployment rate and inject energy into a sluggish economy. The 2012 Republican nominee, Mitt Romney, staked his candidacy on offering an alternative to the weak Obama economy by playing up his experience in the private equity industry.
This cycle, it’s issues like immigration and foreign policy that have emerged the most political salient, thanks in no small part to Trump, the current GOP leader in national polls. The billionaire has made fighting illegal immigration the main pillar of his unorthodox campaign and is forcing his Republican rivals to also address the divisive issue.
But economic concerns are traditionally a top priority for voters and the market’s volatility could help put the issue back on agenda.
“Given the seriousness of what’s happened, this will bring some sanity back to the debate that’s been going on and people will realize that there are more significant issues to be confronted than trying to change the Constitution to remove birthright citizenship,” said Katie Packer Gage, deputy campaign manager for Romney’s 2012 campaign.
But she cautioned that for candidates like Trump and Fiorina, touting their business backgrounds could very well be a double-edged sword.
“It’s helpful because they speak the language,” Packer Gage said. “But Donald Trump is supposedly an expert and he has businesses that went bankrupt.”
After bouncing back from the initial dive in the late morning, the Dow plummeted again and was down about 600 points by mid-afternoon.
New Jersey Gov. Chris Christie placed the blame for the volatility squarely on the president’s “failed policies” and blasted the White House for not getting a handle on the national debt.
“As the Chinese markets tend to have a correction, which they’re doing right now, it’s going to have an even greater effect because this president doesn’t know how to say no to spending, doesn’t know how to say no to a bigger and more intrusive government,” Christie said on Fox News.
On the other side of the aisle, Vermont Sen. Bernie Sanders seized on the chaos to reiterate grievances about “Wall Street and the billionaire class” that he said have “rigged the rules.” Sanders has made attacks on Wall Street and special interests a major part of his candidacy, as he seeks to draw a contrast with Democratic front-runner Hillary Clinton. Clinton has not yet weighed in on the Dow’s drop.
“We need banks that invest in the job-creating economy,” Sanders said. “We don’t need more speculation with the American economy hanging in the balance.”
Many economists urged market watchers to avoid panic, pointing out that a course correction in the stock markets should not be confused with fundamental weakness in the U.S. economy.
“Whenever you get large market moves, especially ahead of a presidential cycle, there’ no question that people are going to talk about it,” said Deutsche Bank’s chief U.S. Economist Joseph LaVorgna. “It’s very easy in the short-term, especially in the thick of things of both political and economic, to react to an event which oftentimes evolves in a way that many of us don’t foresee.”
White House spokesman Josh Earnest said Monday that the U.S. economy remains “durable” despite increased volatility overseas.
“There’s no doubt that the global economy is more interconnected than it’s every been,” Earnest told reporters in the White House briefing room. “But what I would encourage people to evaluate is the ongoing strength and resilience of the U.S. economy.”