On Nov. 7, as Mitt Romney slowly came to the realization that it was time to strap the dog to the car and ride off into the sunset, the Dow dropped like a stone, eventually settling at 313 points lower for the day.
To Republicans, it was just the salve they needed to soothe the gaping chest wound that had opened the day before when Ohio fell to the Mongol horde, ensuring four more years of secret Muslim theocracy/godless libertine excess.
That day and the next, as the stock market swooned, GOPsters crowed to the rafters about this sudden hemorrhaging of paper wealth, wringing their hands in a curious display of despair and glee that couldn’t help but bring to mind a mental patient waiting in line for his daily ration of Cocoa Pebbles and lithium.
Indeed, as I went about my business, I heard at least one Republican loyalist imply that Obama’s re-election, and that day’s trading activity, portended doom for the Dow. It was a singular moment, for rarely do the fish jump in the barrel of their own accord, load the musket ball and gunpowder for you, tape fluorescent yellow targets to their own backs, and helpfully diagram how the Coriolis effect could potentially throw off your aim.
“Um, you might want to check where the Dow was four years ago,” I responded, simultaneously beaming with pride and reddening with shame, like a grown man who had just defeated all comers in morning recess tetherball.
Of course, the theory that the Dow had plunged because we elected a Marxist president – the same character whose tenure had coincided with a 67% rise in the Dow up until then – is, to put it charitably, chock-full o’ nuts.
Sure, some investors were likely taking profits in anticipation of higher capital gains taxes, and the fiscal cliff was no doubt worrying. But to say that President Obama has been a scourge on the nation’s 401(k)s is a little like saying Fox News has depressed sales of Gold Bond Medicated Powder and bunker supplies.
But while context was evidently lost on many a teeth-gnasher in the wake of Obama’s big win, I couldn’t help but recall a Bloomberg Government article from February – published right after the Dow topped 13,000 – comparing stock performance under both Republican and Democratic administrations. Bob Drummond, who wrote the article, found that if you’d invested $1,000 in a hypothetical S&P tracking fund when the Kennedy administration began and measured it only during Democratic administrations, it would have been worth $10,920. The same $1,000, measured only during Republican administrations, would have been worth $2,087 when George W. Bush left office.
That’s a big difference. Is it a coincidence? Sure, it could be. But if you’re a betting man and don’t want to lose the house, you’re more likely to wager on the 10-2 favorite than the 2-10 long-shot, right? So doesn’t it make sense to watch the whole movie instead of just a 15-second clip?
The story doesn’t end there, of course. As Bill Clinton noted in his scintillating Democratic National Convention speech, over the past 52 years, Democratic administrations have a healthy lead when it comes to job creation, besting their GOP counterparts by a tally of 42 million to 28 million, even though Republicans have been in office slightly longer (28 years to 24).
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So whether you’re a working stiff, a member of the investing class, or both, history says to put your money on the Democrat – that post-election-day swoon notwithstanding.
But how can this be? Haven’t we been told over and over again that Republicans are the hardheaded, responsibility-loving older brother to the Democrats’ fuzzy-noggined, pie-in-the-sky prodigal son? Shouldn’t those seeds of prosperity, planted in the rich loam of conservative policy, produce a healthier harvest than the Democrats’ wayward efforts?
Well, not if everything you’ve been told is wrong. Isn’t it possible, after all, that funneling money into the hands of the poor and the middle class, who are likely to spend it right away, packs a bigger economic punch than delivering more tax cuts to the already wealthy?
Democrats have long argued such. Maybe it’s high time we listen.
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