How the Economy Functions Under a Democrat and a Republican President

Stock Market

10. Stock Market

Election years tend to take a toll on the stock market, based mostly on the uncertainty that comes with a shift in power. However, both Democrats and Republicans have perspectives on Wall Street, with the former focused on implementing regulations to safeguard consumers. The latter party steers clear of endorsing broad government regulations, instead leaving banks and other financial institutions to self-govern. Tightening regulations on banks has the potential to leave consumers without enough access to affordable financing, ultimately leading to a slowed or receding economy. Loose regulation, however, paves the way for unsettling practices by some financial institutions, leaving consumers exposed to a recession similar to what took place in 2008. Each of these policies has the potential to affect the stock market’s overall performance in a significant way.

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