The end of the Bush stock market

January 16, 2009

Today marks the end of the Bush stock market.

He has presided over the evisceration of more than $4.6 trillion of U.S. stock market wealth as measured by the S&P 500.

By comparison, the S&P 500 gained more than $9 trillion in value under the eight years of Bill Clinton’s administration.

19 comments

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This one is easy. Clinton benefited from the Reagan and Bush economic policies.

Then Bush inherited the Clinton economic policies.

In addition, Bush also inherited the Clinton recession and as the stock market graph clearly shows, he addressed it with tax cuts and the market grew to its highest level ever 14000+

Taken together, the economic policies of the last 30+ years contributed to the current economic downturn. This is one thing Ron Paul got right, many decades of economic policies brought us where we are today. It isn’t just Bush or Clinton or Bush or Reagan or Carter or Ford or Nixon… It was the entire government.

I know the Bush detractors want to blame the beginning of time on him, but he gets too much credit. It is a shared downturn.

Eric, please comment on the article rather than me or anyone else. Take a chance, be bold by commenting on the writer of the op ed rather than coming from behind and attacking people after they have given their opinion. It shows you don’t have a mind of your own.

Posted by TC | Report as abusive

I’m sorry, but this is the typical arrogance that I’ve come to loathe from reuter’s. As a financial analyst who has been advising people on this very instance for years, I can say Bush, as much as I don’t like him, had the most minor role imaginable in what the stock market did.

The failure during his presidency was the final deathknell of the Reagan administration, and the completely irresponsible fiscal behaviour and snowballing deregulation he inspired.

Clinton was also not responsible for the profitability of his term. He happened to be president at the time the INTERNET BECAME MAINSTREAM. Startups were printing money like mints, and people couldn’t get enough.

At least you didn’t write an article on this, because I think you know EXACTLY how slanderous you would have been if you would have expounded on what your charts and vagueries are designed to imply.

Posted by Kitty | Report as abusive

I think Kitty wins the point here, tying the performance of the stock market to a presidency doesn’t work. There are to many variables in the market to attribute it’s ups and downs just to who is in the White House. The more important numbers are things like unemployment, job growth, national debt…..etc. All of these things were stronger under Clinton and as I recall Clinton inherited a mess from Bush 41. The Reagan era trickle down theory didn’t work in the 80′s and it didn’t work this time under Bush 43.
I’ll give you one example of what I mean. Unemployment in 1992 when Clinton took office was 7.5%, when Clinton left office it was 4.0%. It has steadily risen under Bush 43 to almost 7% again.
Ok one more example, in 1992 when Clinton took office the debt was $399 billion when he left office it was $18 billion. The national debt today tops a TRILLION DOLLARS, the highest in history. The last president to record a record high debt was Bush 41 at $432 billion.

TC, does this work for you or do you feel attacked? Pointing out where we disagree is not an attack, it’s a difference of opinion. I expected a thicker skin from someone who is constantly attacking Dems and leaving out the failings of Reps.

Posted by Eric H | Report as abusive

Eric, go first sometime and take the risk of being the first to comment on an op ed piece. You won’t and never do.

Cherry picking through someones answer with half truths isn’t bold, it is isn’t even original thought.

Your answer above takes what both of us before you making Kitty and I right. Thank you. You are still wrong though.

The unemployment has not steadily increased under Bush. It was under 5 percent for most of his presidency. If you are talking about it steadily rising, you are only giving a half truth. Since October the end result of decades of bad policy (democrat and republican) are showing up just now.

Posted by TC | Report as abusive

I am no Bush fan but I do know a bit about the stock market and what we are seeing is the result of government interference in the workings of the marketplace to achieve a desired end. First the government initiated the problem by browbeating and blackmailing bankers to make bad loans using social justice criteria rather than time tested financial strength criteria, then the regulators turned a blind eye to the abuses that began to cascade through the pipeline as more and more instituions began to package and sell more and more paper in order to compete with other institutions doing the same thing (the bad coin always drives out the good coin), then once the bad paper was laced through the system mark to market accounting standards were instituted and the value of the paper was destroyed, finally rather than letting all the rascals on both sides of the transactions blow up quickly the very people who orchestrated the disaster opt to “bailout” the co conspirators thereby simply delaying and intensifying the day of reckoning which will come in the form of worthless currency and massive inflation. This is not the Bush stock market. This is what happens when a capitalist market oriented economy is sabotaged to failure in order to bring in a socialist economic system. There are plenty of Democratic and Republican villians in all this, and like all villians they think they are doing good.

Posted by nostromo | Report as abusive

The price earnings ratio on the S&P 500 was over 30 when Clinton was leaving office. The long term average is about 16. To brag about the wealth “created” while Clinton was in office is laughable. Plenty of articles were being written long before the 2000 election about how the outsized gains of the 90s were a short term phenomenon. After the market peaked in 2000 there were more than a few experts saying it might be 15 years or more before the market regained its internet bubble peak.

And it was written, again long before Bush’s policies had time to have any meaningful effect, that the low interest rates enacted by the Fed were merely postponing a deep recession. And speaking of Greenspan, the Fed cut rates in 1998 during the Asian financial crisis essentially allowing them to export their way out of their problems. And he further fueled the “irrational exuberance” he had warned about. Simultaneously, the collapse of demand from Asia also made oil prices plummet. Clinton got a perfect storm of conditions. Rising imports kept a lid on inflation as much if not more than increases in productivity.

And Eric, the debt and the deficit are two different measures. You can’t use them interchangeably. Learn the difference.

Posted by Terrence | Report as abusive

okay – I’m no economics expert … but I seem to recall that the first dip under Bush’s terms was coming any how when he was running against Gore, Gore even warned about it. And as far as the ‘surplus’ I also seem to recall that it was only on paper and when you think about it, it just meant that the government OVER charged the public at the time – and they didn’t WANT to give the money back, Bush made them. Actually its easy to throw together a graph, but there isn’t anything that tells you exactly what the graphs are comparing – oh sure you can make some assumptions, but what exactly is the ’0′mark? And I seem to recall that the S&P tends to effect the mortgage rates more than the Dow or Nasdaq — so it isn’t a really good indicator of economics but rather the mortgage market. But like I said I’m not an expert, its just what I’ve heard on those financial channels on cable.

Posted by ginger | Report as abusive

Tying the stock market to single presidencies may not be the most reliable indicator of trends, but on the whole it is true: The stock market has done better under Democratic administrations than Republican ones.

Read it and weep, laissez-faire dreamers:
http://money.cnn.com/2004/01/21/markets/ election_demsvreps/

Posted by CapnZilog | Report as abusive

you have got to be kidding, will not let up. Bush did more and better than any president EVER. He did every thing FDR did, only more. He took the economy after 9/11 to records, the man is a saint. Let up, do not talk bad about the dead, just be neutral if you can not be nice.

Well no wonder Bush had 911 and Clinto didnt. Clinton also had Regan economics and Bush 43 had Clinto resession.

here is a classic example of the left media trying to show Bush was all bad!

Posted by J | Report as abusive

Presidents are like quarterbacks, both get too much fault/blame.

But for all of the folks who reflexively blame Clinton for everything, here’s a more challenging fact: look all the way back to 1900 and you’ll see that the market performs significantly BETTER under Dem Presidents.

This is a terribly inconvenient fact for a party (the GOP) whose main selling point is their vast superiority to Dems when it comes to the economy. In other words, if there was any truth to this selling point, there’s no way that over such a long period of time the results would come out in favor of Dem Presidents.

Spin, spin, spin, facts are still facts.

Posted by G | Report as abusive

G. That’s because republican administrations had to undo all the damage democratic administrations did to the economy. All the good work republican did, didn’t show up until the democrat took over.

I have had several democrat friends who have always enjoyed the fact republicans fix the economy, but it doesn’t show up until a democrat takes over.

Since it takes time to make the changes work, it always seems to benefit the democrat. Clinton came into office and within a few months the economy was starting grow, becuase the Bush economic changes finally took effect. It always takes time for something good to happen, not immediately when the democrat takes over.

Yes, facts are facts. Thanks for telling half the story.

Posted by TC | Report as abusive

TC,

Thanks, but you completely ignored my main point.

The GOP’s main argument on behalf of R candidates is how great they are for the economy and how dangerous Dems will be. The fact that there is substantial evidence pointing in the opposite direction would leave any objective observer wondering about the GOP case. Note that this is supposed to be the leading issue for Rs and that the evidence for that side is mixed, at best.

There may be some truth in what you say, but there’s no way that you can spin these kernels of truth into decisive proof that Rs are better for the economy. And if Rs can’t offer such proof on their main issue . . .

Unfortunately, there are plenty of folks on both sides who work backwards from ideology and selectively look for “evidence” for their predispositions. And, sadly, there is a huge industry that fills this “need” by serving up exactly what these folks are looking for (Air America, Rush L., Ann C., etc, etc, etc).

G

Posted by G | Report as abusive

And neither can you prove your position either.

I offered up the whole truth, while you gave only half of it.

Posted by TC | Report as abusive

TC,

Try responding to the point that I’m actually making.

Again, my point is that the evidence does not decisively support the GOP argument about how awesome they are for the economy and how horrible Dems are. As a matter of simple logic, I don’t need to tell what you misleadingly call “the whole story.” I merely need to offer credible evidence in rebuttal, which is exactly what I did:

Major premise: If the GOP is vastly superior to Dems on the economy, there would not be any credible evidence to show that Dems are better.

Minor premise: There is credible evidence to show that Dems are better.

Conclusion: The GOP is not vastly superior to Dems on the economy.

On the other hand, you offer a theory that may or may not be true. I’m guessing that you aren’t an economist and/or that you really have not done the careful, objective, highly detailed analysis that would be required to support your theory. And even if you have such intellectual heft on your side, there are plenty of Economics PhDs who have done such research/analysis and who conclude that Milton Friedman and Ronald Regan got it completely wrong. Again, this plays right in to my point; the GOP offers vast superiority on the economy as its main selling point and the evidence for even a slight advantage is mixed.

And if you can’t substantiate your main selling point . . .

G

Posted by G | Report as abusive

Actually, what you are doing is not offering an objective conclusion that you are correct. It is like a court case where you find the accused “guilty beyond a reasonable doubt.”

It doesn’t mean that person isn’t guilty, but if there is reasonable doubt, then he must be set free. Kind of like your insistence by implying the democrats are better at the economy than the republicans.

Fine, you have shown that there is no answer beyond a reasonable doubt. But just because you have done so, doesn’t mean the democratic administrations did not indeed benefit from the hard work of the republican administrations.

As for your “plenty of economic PhDs”, well we all know the economists get it wrong all the time. There are economic Phds getting it wrong right now about the stimulus plan/debate taking place right now. At the same time there are other economic Phds who are getting it right. Which ones are right and which ones are wrong? I guess we will see.

I don’t see how going deeper into debt in order to get out of debt will give you anything other than debt. You can’t do it in your own life, so why would you ever think it can be done now?

Any answer by you will only be an opinion like the one I just gave, you can’t prove anything either “beyond a reasonable doubt”. But time will tell whether the road Obama is going to take will be right or wrong. When we find out, then this discussion can reach a reasonable conclusion.

Have a nice day. On to other discussions.

Posted by TC | Report as abusive

I guess we can safely assume that Obama has inherited Bush’s policies.

Posted by kd | Report as abusive

Yeah, and you cut the charts off just like a love sick pup for Clinton lies, that showed a sharp down turn beginning the last year of Clinton that continued his recession into 2003 of where it was worsened by 9-11 … Despite the inherited recession and 9-11 you liberal love sick dimwits fail to mention Bush’s stock market soared to twice that of Clinton’s and was a massive success until the Democrats took control of Congress in the last two years and refused to control soaring oil prices, refused to drill, refused to reform Fannie and Freddie and did everything they could to kill the economy for the upcoming elections.

They succeeded and now they are still killing the economy clapping their hands at a measly 9,000 points and soaring unemployment. Yeah, Bush was terrible and it was his fault gasoline was up to records levels but no one thanked him when they dropped back from 5 bucks to 1.30 after he lifted the ban on drilling and forced the democrats to act — something they retracted under Obama and now gasoline has doubled from its previous low.

Is that Bush’s fault too? Liberal lies and liberals idiots trying to paint a false lie. Some of us escaped your dumb-down public education system and can read.

Posted by duke snider | Report as abusive

As much as it pains me to say this, I have to admit it – my Democrat friends were right.

They told me if I voted for McCain, the nation’s hope
would deteriorate, and sure enough there has been a
20 point drop in the Consumer Confidence Index and greater since the election to a historical all time low – much lower point than any time during the Bush administration.

They told me if I voted for McCain, the US would become more deeply embroiled in the Middle East, and now,
tens of thousands of additional troops are scheduled to be deployed into Afghanistan.

My Democrat Party friends told me if I voted for
McCain, that the economy would get worse and sure
enough unemployment is at 9.4% and the new stimulus
packages implemented recently have sent the stock market
lower than at any time since the Islamic Terrorists
attacks of 9-11.

They told me if I voted for McCain, we would see more
“crooks” in high ranking positions in the Federal government and sure enough, several recent cabinet nominees and senate appointments revealed resumes of scandal, bribery and tax fraud.

They told me if I voted for McCain, we would see more
Pork at the trough” in Federal government spending and sure> enough, 17,500 “Pork Bills” showed up in Congress
since January 2009.

I was also told by my Democrat friends that if I voted for McCain, we would see more deficit spending in Washington D..C. , and sure enough, Obama has spent more
in just 30 days than all other Presidents together – in the entire history of the good old USA!!

Well, I voted for McCain in November and my Democrat
friends were right… all of their predictions have come
true!

Posted by Duke Snider | Report as abusive

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