Oxstones Investment Club™By Macromon, Global Macro Monitor,
We’ve been busy crunching data from the Measuring Worth website on the Dow Jones Industrial Stock Index return for each Presidents’ administration going all the way back to Teddy Roosevelt. We find the data very interesting and will, mostly, let it speak for itself. Note, President Obama still has about 20 trading days left in office.
A few caveats, the returns should be discounted for the total days in office. For example, FDR was elected to four terms and served 4,422 days in office before his death in April 1945, while JFK served only 1,035 days before his assassination and Gerald Ford, 894 days, finishing out what was President’s Nixon second term. In general, the longer the time frame, the higher the return.
Also Measuring Worth notes,
Observations from October 7, 1896 to July 30, 1914 are from the first DJIA and has been adjusted to merge with the second series. See Source Note for DJA.
Roaring Twenties Top All
No doubt the 1920’s were truly “The Roaring Twenties!” Check out the returns of Calvin Coolidge, add that to Warren Harding, who died in office in 1923, and couple those with another almost 20 percent move higher in the first 6 months of the Hoover administration before rolling over hard on Sept 3, 1929. That was one helluva bull market and stock market bubble.
President Clinton also presided over a huge stock bull market and bubble with the Dow peaking at 11,722.98 on January 14, 2000. President George W. Bush inherited the bursting bubble that did not bottom until almost two years into his Administration with at 7,286.27 on October 9, 2002. The Dow thus plummeted 38 percent from the Clinton peak to the Bush 43 trough.
The Dow doesn’t do justice to the magnitude of the Clinton bull market/bubble as the dotcoms of the NASDAQ rose and lost much more, more than double the Dow returns. We were forced to use the Dow Jones Industrial Average as it was the longest running time series.
W.’s Bookend Bubbles
President Bush 43, with the second worst Dow performance, inherited a bursting bubble from President Clinton and handed off a bursting stock market — more of a bursting credit bubble — to President Obama.
The only reason we are all not living under a freeway and eating bark — i.e., a Great, Great, Great…. Depression — is the heroic and decisive efforts of Team Paulson, Bernanke, and Geithner. Add Barney Frank to that list, who led Paulson’s effort on Capitol Hill — ironically, fighting against the Republicans, who initially opposed their own White House’s stablization policies. That was, until the Dow fell 777 points after the House’s first thumbs down vote on the Troubled Asset Relief Program (TARP)
.As it turns out, the House actually had to vote twice for the particular bill in which TARP was included. The first vote was on Sept. 29, 2008. The legislation failed to move, though, with 205 representatives voting in favor and 228 against. Of those who voted for the the passage, 140 were Democrats and 65 were Republicans. – PolitiFact
If only these guys — and their collective knowledge — had been around in the early 1930’s, maybe……..? If, only.
Facts versus Opinions
Yeah, yeah, yeah… we get it, some of these guys were partially responsible for creating the bubble and economic/financial imbalances in the first place. And that pisses us off as much as you. But, seriously, folks, let’s not quibble when the house is burning down. Let’ get the fire put out first!
“If you have a neighbor, who smokes in bed. And he’s a risk to everybody. If suppose he sets fire to his house, and you might say to yourself, ‘I’m not gonna call the fire department. Let his house burn down. It’s fine with me.’ But what if your house is made of wood? And it’s right next door to his house? What if the whole town is made of wood? Well, I think we’d all agree that the right thing to do is put out that fire first, and then say, ‘What punishment is appropriate? How should we change the fire code? What needs to be done to make sure this doesn’t happen in the future? How can we fire proof our houses?’ That’s where we are now. We have a fire going on.” – Ben Bernanke
Facts versus Political Opinion
We’re trying to state facts and make objective inferences from the data here. Conflating facts with opinions or not being able to distinguish the difference between the two are the very reason our democracy is faltering, in our opinion
It’s dangerous and we should heed the words of Thomas Jefferson,
“If a nation expects to be ignorant and free in a state of civilization, it expects what never was and never will be. If we are to guard against ignorance and remain free, it is the responsibility of every American to be informed.” – Thomas Jefferson
Look at, for example, the stunning result of this opinion poll taken in May by Public Policy Polling:
It is a fact the stock market it has gone up under Barack Obama. Not political opinion, but fact. Yet by a margin of almost 30 percent, those Republicans polled believe the stock market has gone down under President Obama. Who are these people?
And this:
It is fact, unemployment has gone down under President Obama, almost halved.
This poll may be an aberration, but we can’t help that American democracy is in a bear market. Fake news, facts are political opinions, all the rage. Lord, help us.
Now Ready For Some Data Partisanship?
You know we are fairly non-partisan over here at Global Macro Monitor. In fact, our party affiliation in our state defines as,
Voters who registered to vote without stating a political party preference are known as No Party Preference (NPP) voters. NPP voters were formerly known as “decline-to-state” or “DTS” voters. – California Secretary of State
Nevertheless, let us finish with some data that kind of blew us a way.
The following table looks at the average of the returns of Democrat and Republican administrations on the Dow Jones since Teddy Roosevelt.
Absolutely stunning.
The return on the the Dow Jones Average return under Democratic regimes is 40 percent higher than the average for all the Republican regimes. That is fact.
We could massage and nuance the interpretation of this data until the cows come home. Yeah, the data is skewed by Hoover, but the same can be said by Coolidge’s 262 percent return, no? Yes, Obama almost bottom ticked the Dow and W. inherited a major bear market from Bill Clinton. Or, whatever.
What is really impressive is the over 40,000 percent increase in he index since TR took office in September 1901.
Was Truman Right?
So, after looking at the data, maybe President Harry S Truman was right when he stated:
There you have it, folks. Let the debate begin.
Presidential Stock Market Returns
Tags: chart comparing stock market performance under various presidents, historical employment growth under democrat vs republican parties, presidential stock market returns, stock market returns under democrats vs republican parties, The return on the the Dow Jones Average return under Democratic regimes is 40 percent higher than the average for all the Republican regimes