Sunday, September 9, 2012

Conservatives Are Bad For Jobs *And* The Stock Market

Bill Clinton said at the Democratic National Convention on Wednesday that Democratic presidents have overseen the creation of nearly twice as many jobs as Republican presidents. This is true
Bill Clinton's Stunning Jobs Claim At DNC Actually True
The Huffington Post | By Bonnie Kavoussi

In a "duh" moment, the Huffinton Post published an article proving what economists and stock market analysts have known for years:

"Democratic presidents have overseen the creation of nearly twice as many jobs as Republican presidents since 1961.
"What's the job score? Republicans, 24 million; Democrats, 42 [million]," Clinton said to cheers and applause.
Bloomberg Government first reported these figures in May, after analyzing growth in private-sector jobs since 1961.

"It turns out that advancing equal opportunity and economic empowerment is both morally right and good economics," Clinton said. "Why? Because poverty, discrimination and ignorance restrict growth. When you stifle human potential, when you don’t invest in new ideas, it doesn't just cut off the people who are affected; it hurts us all."

After some blather from the once-liberal-now-leaning-right blog, the article continued:

An average of 63,500 jobs were created per month during Bush's tenure, according to Labor Department data. Under Obama, an average 62,500 jobs have been created per month when taking into account job losses at the beginning of his tenure.

Note the stunning lack of journalistic objectivity - except to say that "...The subsequent financial crisis also happened on Bush's watch, and Obama has been saddled with much of the job wreckage that resulted," the paragraph not only omitted the fact that it is comparing job figures from a two-term president to a one-term president, but also that Bush's debacle happened after the largest peacetime boom in American history., in their 2010 article, "For Higher Stock Returns, Vote Republican Or Democrat?," wrote:

Conventional wisdom in the United States suggests that stock returns are better when a Republican president is in office. This belief is fostered by the Grand Old Party's traditionally pro-business, anti-tax platform. Democrats, on the other hand, are traditionally associated with an anti-business, tax-and-spend platform based on using taxation policies and welfare programs to redistribute wealth from affluent individuals and large corporations to people at the lower end of the socioeconomic scale. Despite these well-established characterizations of each party's position, a 2003 study conducted at the University of California's Anderson School produced numbers that reveal significantly better stock market returns when the nation's highest office is held by a Democrat. Read on to find out more. (To learn more, read Do Tax Cuts Stimulate The Economy?)

Methodology and Data
"Pedro Santa-Clara and Rossen Valkanov published the results of their work in "The Presidential Puzzle: Political Cycles and the Stock Market," which was featured in The Journal of Finance in October of 2003. The duo analyzed stock market returns using Center for Research in Security Prices (CRSP) indexes, including the value-weighted and equal-weighted portfolios. CRSP portfolios track the major market indexes and are created according to clear, unbiased, systematic processes. As such, they are widely used as a foundation for academic research.

Unlike most studies, which are based on total returns, Santa-Clara and Valkanov based their efforts on the average excess return of the indexes over the return of the three-month Treasury bill. The results were striking. When a Republican president held office, the value-weighted return delivered nearly a 2% premium over the T-bill. When a Democrat held office, the premium was nearly 11%. While the 9% difference clearly favors the Democrats, the results from the equal-weighted portfolio were even more telling, with a 16%+ result in favor of the Democrats. (To learn more about T-bills and other government securities, read 20 Investments You Should Know: Treasuries.)

PortfolioReturns Under Republican AdministrationsReturns Under Democratic Administrations
Value Weighted1.69%10.69%
Equal Weighted-0.01%16.52%
Figure 1: Excess returns of CRSP indexes versus three-month Treasury bill, 1927-1998

Further investigation reveals the results were generated by higher real returns and lower interest rates under Democratic administrations. Business cycle fluctuations showed no correlation to the results, demonstrating statistically significant outperformance for the Democrats regardless of underlying economic conditions. Value-weighted portfolios posted a steady 10% premium in favor of the Democrats, while equal-weighted portfolios came in at around 20%. (Read more about recognizing business cycles in Understanding Cycles – The Key To Market Timing.)

Examination of additional business cycle variables revealed that expected returns (those anticipated by the markets) were 1.8% higher under the Republican administrations analyzed in the study, while unexpected returns were 10.8% higher when Democrats were in power, suggesting that stock market results may be driven by Democratic policies that surprise investors. Interestingly, the results do not show up in close proximity to election dates, but rather grow over time during the president's term.


Read more: and:
It is an ironic phenomenon that not only are the intellectually challenged Conservative sheeplets under a misapprehension about the Republican Party being supportive of Wall Street - but so are the Wall Street executives themselves.

It is time that they woke up to the fact:  Conservatives care only for their own wealth and power, and the health and condition of the Dow Jones is as of little concern to them as the health and condition of the American middle class and the poor.

The GOP has changed only marginally since the takeover by the Social Conservative wing, it is just louder; the former leaders, of the Party, the Country Club (Romney) and Wall Street wings (Nixon) of the Party should wake up and take notice: their economic interests will only be enhanced when Conservatism is criminalized.

Update from

Chart of the Day: Bush Vs. Obama on Private Sector Jobs

Posted by icarus on 08 Sep 2012 / 2 Comments

Paul Krugman gets this information directly from the Federal Reserve and the FED gets this information directly from the Bureau of Labor Statistics. You can see his comments HERE. Let’s just call it what this is … under President Obama – the country has grown the private sector economy by significant bounds and even more so when compared to President Bush.
Since February of 2010 – there have been over 4.5 million private sector jobs created. Politifact has rated that claim “mostly true“. Their only issue with it is that while true … they feel it is more fair to use 2009 as a way to evaluate Obama’s jobs performance. But no one denies that over 4.5 million private sector jobs have been created. So – why is unemployment so bad then? Krugman shows us where the public sector is and compares Obama vs. Bush via the BLS.

Government employment is at its lowest level in 45 years (source). And even though there is a war on public sector workers – unemployment would be near 7% if government sector employment grew at the rate as under either Bush or Reagan. You can find that HERE.

We’ve shown this before HERE:
“Because more jobs were created in the private sector last year alone than in all eight years of George W. Bush. Look, we did not get into the economic problems we did because President Obama was in office for two months. The ground was laid by the bad policies of George W. Bush, and that came at the expense of the growing middle class and giving huge tax breaks to the billionaires.”
~Governor Martin O’Malley (D-MD)
We wrote about it HERE:
President Obama’s critics would like to blame him for the jobs lost in January of 2009 even though he was sworn into office on January 20th of 2009. His critics would like to blame him somehow for the 820,000 jobs that were lost in January (source)…and they’d like to blame him for the 716,000 jobs lost in February of 2009. They’d like to blame him for another 750,000 jobs lost in March 0f 2009. In those three months alone – the United States lost 2.2 MILLION jobs on top of the 3.6 million jobs lost in all of 2008. So – the question is…how quickly can a President’s policies (if Congress will enact them) reasonably affect the economy.

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