The stock market prefers Democratic presidents to Republicans

[NNN0LHI]

http://slate.msn.com/default.aspx?id=2071929

President George W. Bush inherited the lousy end of the business cycle. The stock market has been falling throughout his entire term, battered by war, a feeble economy, and corporate scandals. Yet this decay still hasn't shaken Americans' faith that Republicans are better for the economy and the market. Poll after poll shows that when Americans divide up the chores of running the country, they tend to think of the economy and stock market as Republican domain and delegate softer issues, like the environment, to Democrats.

But Democrats, it turns out, are much better for the stock market than Republicans. Slate ran the numbers and found that since 1900, Democratic presidents have produced a 12.3 percent annual total return on the S&P 500, but Republicans only an 8 percent return. In 2000, the Stock Trader's Almanac, which slices and dices Wall Street performance figures like baseball stats, came up with nearly the same numbers (13.4 percent versus 8.1 percent) by measuring Dow price appreciation. (Most of the 20th century's bear markets, incidentally, have been Republican bear markets: the Crash of '29, the early '70s oil shock, the '87 correction, and the current stall occurred under GOP presidents.)

According to almanac editor Jeffrey Hirsch, the presidential party figures are among the most significant he's found. If the stock market were random, we'd expect such a result only one-quarter of the time. "I don't know why people are convinced Republicans are good for the stock market," Hirsch says.

Nor does having a Republican Congress help the market. A Democratic Senate showed returns of 10.5 percent (versus 9.4 percent for a GOP upper chamber), and a Democratic House returned 10.9 percent versus 8.1 percent for the Republicans.

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[mmonk]

1. Markets remain stable for longer periods

of time under democrats because they stick with certain underlying economic principles that republican policies don't due to their more political oriented economic models.

[whistle]

2. When one realizes that even in an economy as complex as....

...ours, stock market prices can be manipulated and controlled, it is not at all surprising why the market appears to behave the way it has been.

Carol Vinzant's article makes an excellent point, but it was written (Jun 2002) when the market was at it's lowest level under George W Bush. It was also the perfect opportunity for this new republican/neo-conservative cabal to make its move back to monopoly-capitalism once more, which is what the current market prices are reflecting.

[caty]

3. When a Democrate is in office

I have a job with overtime. When a Republican is in office I loose my overtime or my job. This is how it has been for the 35 years I have been in the work force. I have been out of work for 2 years now. How can we expect the stock market to go up, if no one can afford to buy anything? Our jobs have been sent to other countries and the wages we make in new employment are far less than what we made in the jobs we lost. It's all we can do to pay our utility bills and buy food--who can go shopping for a new car, furniture, or electronics?

[NNN0LHI]

4. I noticed the exact same thing before I retired

Welcome to DU caty. Glad to have you here.

Don