Markets spent last week watching the Republican Party eat its own and reject seven years of promises to repeal the broken Obamacare bill while the Democrat Party that destroyed the American healthcare system celebrated. For the moment, investors chalked this cynical display of political paralysis as typical Washington dysfunction and left markets relatively unscathed. The Dow Jones Industrial Average shaved off only 1.5% or 317.90 points on the week to close at 20,596.72 while the S&P 500 dropped by 1.4% to 2343.98. The Nasdaq Composite Index lost 1.2 to finish the week at 5828.74 in the wake of a flurry of Elon Musk tweets designed to distract Tesla investors from that company’s massive losses and broken promises.
Who says that the narrative of nonsense that dominates our public discourse is limited to Washington, D.C.? But investors will soon run smack into the reality that Obamacare imposed crippling costs on consumers and businesses that contributed to the worst recovery in modern history. With no prospect that the yoke of this ruinous legislation will be lifted off the backs of the American people for the foreseeable future, markets are likely to turn from irrational exuberance to rational sobriety very quickly.