Chart by Doug Henwood
In February, we discussed an unmistakable trend: over the last half-century, the stock market has invariably performed better under Democratic administrations than Republican administrations. But Doug Henwood has taken this a little further, noting stock market gains over the first 40 months of presidential terms, going back 70 years.
As Henwood found, market performance under President Obama is the third best -- outpacing both of Reagan's terms -- and the average under Democratic presidents in general is considerably better than under Republican presidents.
In 2004, a Bush cabinet official said job creation and GDP numbers don't really matter because "the stock market is ... the final arbiter" of economic success. If that's still true, Republicans appear to have some explaining to do.
It also suggests Barack Obama is the worst socialist of all time. A soaring stock market, record high corporate profits, private sector job growth ... it's almost as if the president didn't listen to Karl Marx at all.
Regardless, most of the major players on Wall Street still detest the president. Why is that? Kevin Drum offers a compelling explanation.
First -- and there's no point in pulling punches here -- they're a bunch of spoiled brats. Over the past three decades they've gotten accustomed to the kind of deference normally offered to grand viziers of the Sublime Porte, and they're simply enraged at the fact that Obama not only doesn't seem very impressed by their accomplishments, but even criticizes them every once in a while. [...]
Which brings us to the second thing: regulation. Like a lot of business people, I think they hate regulation more than they hate reduced profits. They'll fight higher taxes, but in the end, that's a pure money thing and they're accustomed to winning and losing money battles. But regulation wounds them far more. It's a signal that they aren't to be trusted. It's a reminder that someone else can tell them what to do. It makes it harder to earn money from purely financial manipulation.
Whether or not one believes the Democratic Wall Street reform efforts in 2010 went far enough, they were still the most sweeping regulatory reforms of the financial industry since the Great Depression, and they continue to enrage Wall Street professionals. That Mitt Romney has vowed to repeal all of these safeguards and layers of accountability, returning the system to the rules in place during the 2008 crash, has endeared him to the industry.
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Can someone name which regulations were not created because of some abuse of people, the environment or unfair market practices? I am seriously curious.
Not totally sure what you mean, but republicans (except Eisenhower) have focused on creating regulations not because of abuse, but to create abuse where none existed before.
If you carefully examine federal law, you will find there is actually no such thing as "illegal alien". That term was created by the KKK during 1920s.
William Randolph Hearst created that urban legend in the 1910s.
GOP policies caused the population to decline by over 1 million in 1929 and again in 2007. These population declines caused the Great Depression and the Great Recession starting with housing abandonment that collapsed the banking system.
Eisenhower is the only republican president in the last 100 years that did not focus on punishing immigrants and minorities. Eisenhower did bad things in the Middle East, but he did not abuse human beings living in the US.
The American people have finally had enough. They are fed up. They are fed up with Wall Street, with Corporate America, with greedy bankers, with greedy executives, with millionaires getting tax cuts and bailouts, and with Congress for waging brutal class warfare against working people. It wouldn't surprise me if this country is hit with the kind of massive societal unrest that has swept through the Middle East and Europe. We have been pushed to the brink... http://www.sunstateactivist.org
That was called OWS... It's a dead fish.
You can call Occupy Wall Street a dead fish if you like, but it did change the conversation. "We are the 99%" means we can at least talk about how much the 1% pay in taxes. And it energized the progressives in a way that will resonate in the fall.
@MikeinMichigan,
Ditto.
well that dead fish sure fertilized the movement to grow into a strong energized progressive movement that may seem to be out of sight, to the ones who want it to go away.
What good has it done? (A serious question.) Seems like a bunch of people being angry but totally ineffectual at creating any real change.
One contradiction of OWS is that participants oppose organization.
The message has gotten out, but the movement remains grass-root with no serious political platform.
Would be nice if that improved by November.
The Occupy movement is far from dead! There has been a great deal of strategy and planning going on quietly. The Movement will be back in force with the coming 99%Spring. http://www.the99power.org/a-public-service-announcement-from-the-99/
Right. Just because something isn't in the headlines, doesn't mean it doesn't exist. Occupy is still there, still alive, still evolving. Basically, all claims that the movement has died without accomplishing anything arise from a deliberately unrealistic demand for instant, spectacular results.
Real GDP, real profits in the long term, come from providing real value. That leads to better share prices. Good corporate governance, including regulations as well as corporate culture, makes for a more stable and predictable market.
When Wallstreeters are left to their own cleverness, they make money for themselves and their clients by churning, by fees, by speculation. None of that leads to any real increase in value, so they are simply taking money from someone else.
"The reports of my death have been greatly exaggerated." Mark Twain.
and OWS. . .
And another old chestnut: "Great oaks from little acorns grow."
As
Bachman Turner Overdrive said, "You ain't seen nothin' yet!"
It ain't over 'til the monopolies are exposed and regulated. OWS is morphing into a HUGE movement.
It won't be over until there is a stop put on the foreclosures, the utilities are not able to shut anybody off in the winter, everyone has access to a decent education and everyone has medical care. The massive amount of wealth that went to the upper 1% could do all of this AND get us out of debt. they should raise business taxes to 90% of revenue after expenses, like in the 50s. That money alone would make the middle class larger, keep everyone working and educated and healthy. If we do not take care of the middle and lower class, pretty soon, we will be just like "The Jungle" by Upton Sinclair. Maybe we should all re read it.
"The question is wheather reform will come on a scale that's needed."
Robert Reich; "AFTERSHOCK"
"...it's almost as if the president didn't listen to Karl Marx at all." Choice snark! Love that!
Marx, no. Trotsky? YES! i wish our President were a whole lot further to the left. But reality is that he's a centrist. If he can help this country get going again, as he has so far, I say give him the next four years to make it better. Mittens wants to go back to the Bush era ideas. that's like saying, "hey, let's go driving in the ditch again!"
It'd be nice if there were more openly and aggressively leftists in media and politics. It doesn't all depend on just one person. It's the right, after all, that is seeking a savior.
But speaking of Marx, one thing that he was right about is that none of us will really be free until those who are running and ruining are lives are (not literally, but relative to their current absolute dominance) put in chains.
Marx was spectacularly wrong about human nature, though. He thought that it was malleable. Change the means of production, change the economic system, and you change people. He knew nothing about psychology and even less about the psychology of authoritarian personalities. That is a big, big flaw in his expectations for social evolution/revolution. People like the Koch brothers will always be with us. Unless they can reliably be neutralized somehow, they will always find a way to screw things up for the rest of us no matter how the economy is structured.
I'm constantly amazed at the double talk provided on some of the financial TV shows. They hype stocks, shouting about how great earnings are, how stock prices are way up, and how terrific the outlook is for corporate earnings.
Then, in the next breath, they're angry at Obama because the economy's doing so poorly, talking about how his re-election would be such a disaster for the securities markets.
Both can't be true.
It is called denial.
The only reason everybody dislikes Obama is because before he was elected, the fat ol Rednecks were smokin' cigars on their front porch and didn't even worry because everybody knows no half black kid will ever be elected. Once he won, those cigars fell out of their mouths and they were outraged. McConnel said two years ago, his only agenda is getting rid of Obama, and that was before he even knew what obama could or would do. He didn't care, he just wanted him out of there. the obstruction and filibustering is horrendous, going to ruin this country. and they don't care, as long as centrist, stock market loves him, they want him out.
@Willow-369182,
Wild indians also like Obama.
Willow, you may have hit on the answer to Rachel's question about why Republicans have gotten so extreme so quick on abortion.
The right has always been content to lose an election here and there because they counted on winning in the long term. But the election of a black man to the presidency must have given them an existential shock. The right always purifies and gets more extreme in response to a loss, but this time they lost one of the biggest prizes to a candidate whose identity should (in their view) have made him completely unelectable. Possibly they started to panic and feel that time was no longer on their side, so they started to purify faster and harder than ever before, and begin galloping instead of trotting further right. It's probably not a coincidence that the GOP has gotten so extreme so quickly on a wide range of issues, not only abortion, just since the 2008 election.
Absent robust and real regulation that inspires investor confidence, more and more trades will be executed in markets that do provide adequate investor protections. Permitting fraud in financial reporting is suicidal but that is what Congress just did and POTUS signed it.
The "retail" investor has been burned to often and deeply to come back anytime soon.
FDR's reforms were needed to repair the damage the last time the banksters went wild. The JOBS Bill just eroded that and then some.
That line third from the top should say "Obama 1".
My favorite line has a typo: "It also suggests Barack Obama is the worst socialist of all time."
I'm sorry, but this doesn't help me - "market performance under President Obama is the third best -- outpacing both of Reagan's terms" since we all know he took office when the market was at bottom in a very bad recession. I think It's useless statement.
Also, the Republicans will say the election is about looking forward. And Romney is just the best face on "not Obama." And - the deficit is everyone's problem. Yet the Rs will always pivot to cutting spending. Really, the public needs to know that without increasing revenues, the Romney-Ryan plan is Severe Austerity. We can look forward to the same mess Europe is in. Whoopee.
Now, how Romney gets away with lying about how "Obama made the recession worse" stands squarely on the liberal press and - Obama. TRMS should trot out the "liar liar pants on fire show" every week. But Obama's campaign needs to make that case very clear as well.
The R's, aka the Teapublicans only care about cutting social programs, road & bridge repairs, education, health & human services; they always increase military spending, needlessly to pad their own pockets.
They LOVE wars, especially since they and theirs don't have to serve in them; serving one's country is only for the middle class, the poor, Independents & Democrats.
Romney hasn't gotten awat with anything yet Mr Obama is loaded and getting the trigger ready for the squeeze,when he does that will show romney for what he is,a lieing dogfaced fool, standing there on election night, talking to himself and asking why!
Sorry, I'm a little old boomer librarian and don't understand the bit about the "useless statement" of Obama's third best place, taking office at the market's bottom and the market growing out of deep recession....isn't it better to be at the top of the ladder climbing out of a really deep hole, than standing at the bottom with no ladder and no help in sight? So we have reached the street level from the tunnels and the pit and still have to climb the staircase to the 2012th floor, but at least we can see the goal now. Step back from the edge and re-elect the guy with the ladder...at least he's doing something constructive!
Reagan took office when the economy was struggling and the unemployment rate went up to nearly 11% in 1983, worse than Obama's highest rate. In Jan 1984 it was still at 8% and was around 7.5% all year. Interest rates were 16%, inflation was horrifying, the national debt doubled from 9 mil to 1.8 billion. The DOW did go from 900 to 1200, So What! And this guy was re-elected in a 49 state landslide. WTF! This country is so full of hate and Reagan knew it and tapped right into it. How he convinced America that that crappy economy was "Morning in America" is beyond me.
The plain fact is, GW Bush left the stock market about where he found it. First term negative due mostly to 9/11. Recovery after that due in part to deficit spending on the wars.
If you want to say Obama's number is inflated by the fact that he started in a hole, OK. But at least he went in the right direction.
And, taken together, the S&P 500 has grown 50% faster under Democratic presidents than under Republicans. That's the main takeaway here.
FauxPas ... Republicans can't have it both ways. They can't ignore gains in the Dow Jones Industrial Average since Obama took office without also acknowledging that increases in unemployment had much to do with that same deep recession.
Mike ... Actually, Bush didn't "leave the market about where he found it," unless your definition of "about" is pretty broad. When GWB took office, the Dow was at 10,587.60; on his last day in office, it closed at 8281.22. That's a drop of 21.78% during his eight year tenure.
I know these wall streeters, I've supported them (in IT) for decades, they are simply, spoilded brats. I once witnessed a 40 something Managing Director, start to cry, becuase his stock value went through the floor during black tuesday. He said, 'I have to leave now, to sell my Jag, so i can pay my $20,000 mortgage this month."
This the same guy who went home to sleep after making 20 younger bankers stay up all night to produce a proposal book for an M&A that was not really time sensitive, he just wanted to look good to upper management and the client.
Or perhaps the Hedge Fund manager, who was bitching at his CPA on the phone, 'What do you think we invented these transactions for, of course I want all 2 billion to be seen as Capital Gains, I'm not some schmuck (he was no jew) that has to pay payroll tax rates, I want to pay my Effing 15%, not a penny more".
Oh yeah, thev've gamed the system for years, bought the Pols in congress, have help from the Far right and Fox and its still not enough for them, they want it all.
Frankly, Im sick of it, THere should be NO Captial gains on anything other than Stock buys and sells. ALL OTHER INCOME should be taxed at full bracket #'s, no matter the source. They only out you should get is 401K, IRAs and Gov't bonds.
The hedgers and derivatives guys, created these instruments specifically to get out of paying taxes. Whats more, they game their employees into supporting them and the transactions by providing 20-200% of their comp in the form of .....Stocks and options, which are of course only taxed at %15. Tada.....screw them all.
So if 3000 of these folks made 1billion each, then they paid collectivly 450billion in capital gains. Not bad, but if they paid relative to their bracket, lets say 30% for ease of calculation, they still owe the treasury $450billion. seems to me, worth going after. either change capital gains rates, or make hedgers or Derivative comp. not be eligable to be capital gains.
my 2cents
I'm right there with you Rob Roday.
They are indeed brats, even the taxpayer bailout was insufficient for them after they pushed the policies that drove the 2008 explosion that tanked pension funds, only to have Republicans blame (union) employees for being the necessary cuts, not regulating banks, et al!
The bottom line:
They do not have any conscience besides cranking out profit. Snubbing the employees and consumers that bring about the profit.
These same bozos who complain about regulation are the first to put their hands out for government largesse in the form of TIFs, public venture capital, business tax breaks, just for a few examples. Big government is a problem for them only when it doesn't contribute to a market or financial advantage.
if they do away with the regulations ,we are really in for a hard ride, to the poor houses.
John Mack of Morgan Stanley said it best when he opined that the Street needs vigorous regulation because they are otherwise caught up in a race to the bottom. If one outfit shaves corners, they all then do to stay "competitive". In a more forgiving world we might have Eliot Spitzer as Chair of the SEC.
Clinton 2?
I've read all the comments posted and, sorry, Kevin Drum had it nailed in those two paragraphs cited by Mr. Benen.
Spoiled brats certainly, but spoiled brats who can do an enormous amount of damage...
The Republicans have for years believed that one can run the government like a business. Simply not true. And that is why they continue to make a mess of things when in power. They talk a good game but one only needs to look at charts like Kevin Drums' to see the reality. Republican have an mythological sense of both government and the economics of public finances. A clear example is the recent legislation to require those on public assistance (family aid, unemployment, etc.) to test for drug use. This is not a new policy - and those states and counties that have tried this "fiscal strategy" over the past 15-20 years have found that it costs the goverment more to administer this type of program that what it is worth. Another case is continued funding of useless or outmoded armaments - they will cut funding to put food in the mouths of children, but increase funding to put bullets in their little bodies.
"it's almost as if the president didn't listen to Karl Marx at all."
Just to quibble... you mean read Karl Marx? :)
"In 2004, a Bush cabinet official said job creation and GDP numbers don't really matter because 'the stock market is ... the final arbiter' of economic success."
If they really said that, it sounds like they have some explaining to do anyway.