Obama's Fault?

Chris Matthews a little earlier spoke to CNBC's Charles Gasparino shortly before President Bush took to the airwaves (and immediately after he ended). Gasparino stressed that the stock market has been tanking as election of Barack Obama has become more likely, though he neglected to notice that Repubs are gradually replacing their expedient criticism of deregulation with their more traditional idealization of the free market. Neither did he imply the market has been responding to colder weather in the western U.S.A., the advent of the fall television schedule, or the collapse of the Chicago Cubs in the playoffs, which has as much connection to the fall of stocks as he presented for the improved prospects of Mr. Obama. Gasparino did blame what he referred to as support for "higher taxes" which, he contended, the Democratic nominee "really hasn't backed off." (For those convinced that MSNBC is unfairly biased toward Democrats, note that Matthews didn't challenge the relevance of the correlation between Obama's rise and the market's fall, nor the validity of the charge that Obama advocates higher taxes.)

Following the President's speech, Gasparino did lament Obama's support for higher income taxes on couples earning more than $250,000, which made empty his earlier (passing) reference to the importance of cutting the budget. The remarks did remind me of an item I recently read which appeared in USA Today, written by a Matt Krantz, which found a greater increase in the Dow Jones Industrial Average under Democratic presidents than under Republican presidents.

This was written, in a question posed to Krantz, not a few days ago- but on December 2, 2005, thus excluding the recent plunge, but including the years from 1901 through 2004. The data was taken from the 2005 edition of the Stock Trader's Almanac by Yale and Jeffrey Hirsch.

It may be of little significance how the stock market responded to the president of a particular party 80, 60, or even 40, years ago. Drawing simplistic relationships between the ascent of a particular political aspirant and performance of any aspect of the economy prior to his election should be approached with caution, whether by you, me, or a reputed expert on CNBC.