Michelle Malkin and several other conservative bloggers are having a lot of fun with this particular statistic:
On Nov. 4, after Barack Obama clinched the White House, the market closed at 9,625.28.
In mid-morning trading today, the day President Obama signs his massive Generational Theft Act into law and a day before he unveils a massive new mortgage entitlement, the Dow dropped to to 7,606.53.
Now, imagine if President Bush had presided over a 2,000-point stock market tumble in the same time period — during the first few months of his presidency.
Great start, O.
As Steven Taylor, who is no Obama fan, points out, Malkin and those who’ve linked to her today are ignoring a very simple fact:
Without getting into anything else, I would note that Bush was still President from November 4, 2008 until noon on January 20, 2009. That comes out to 106 days between election day and today. Of that time, Bush was president roughly 78 days, 73.6% of the time in question while Obama has been president 28 days, or 26.4% of the time in question. So even accepting the notion that whomever is in the White House is directly responsible for the Dow (a dubious proposition, shall we say), Malkin can’t tag Obama with a 2,000 point slide.
And that becomes more apparently when you look at the charts, and the numbers.
First, here’s how the Dow Jones average has performed from November 4, 2008 through last Friday:
On November 4th the DJIA was at 9625.28, and it closed at 7850,41 on February 13th. That’s a drop of 1,774.71 points, or 18.44% since Election Day.
Second, here’s the chart for November 4th, 2008 through the last day of the Bush Administration, January 20th, 2009:
From 9625.28 on the November 4th, we fell to 7949.09 on Inauguration Day. That’s a drop of 1676.19 points, or 17.14% during the final months of the Bush Administration.
Finally, here’s how the Dow has performed since Obama took office:
From 7949.09 on Inauguration Day, we’ve fallen to 7850.41 as of last Friday. That’s a drop of 98.68 points, or 1.24%.
In other words, 94.49% of the drop in the Dow since Election Day occurred while George Bush was still President and doing things like, you know, bailing out the dinosaurs in Detroit.
And, oh yeah, the Dow was about 2,710 points lower when George Bush left office than it was when he entered. That’s a drop of 25.43%.
Taylor goes on to note:
[P]olitical and economic “analysis” along the lines of whatever happens on a given day is the fault of whoever is in the White House on that day is radically simplistic, if not patently ludicrous. Someone needs to tell Malkin that if that is way we are scoring things, then 9/11 is solely George W. Bush’s fault and Clinton gets all the credit for those budget surpluses back in the 1990s.
So, nice try Michelle, but you missed that one by a mile.
February 17th, 2009 at 4:17 pm
Bravo on this post. I hate the simplistic mentality of voters that only use correlation as a means of analysis and not causation. People like malkin writing like this only exeserbates this behavior. And this is exactly why Obama will likely be relected because even though his policies will have little if anything at all to do with our eventual recovery, he will take all the credit and bush, who is not anymore guilty of causing the current crisis then anyone else in the polical establishment that has supported things like allowing the over levergaing of the GSEs, will get all the blame.
February 17th, 2009 at 4:37 pm
[...] the overall trend even before Bush for the market to do better under Democrats than Republicans. Doug Mataconis and Steven Talor, neither of whom supported the stimulus bill, both debunk the idea that [...]
February 17th, 2009 at 6:37 pm
Did you ever stop to think for one moment that perhaps the drop under Bush was because he was leaving office, and economics, brokers, and others were scared shitless of the prospects of living under Communist rule with Obama?
February 17th, 2009 at 6:40 pm
Did you ever stop to think that the drop under Bush was because he was the biggest spending President since Lyndon Johnson ?
Face it Eric, Bush sold Republicans down the river for eight years and then sealed the deal with TARP and the auto bailout. Whatever happens now is because he made it possible.
February 17th, 2009 at 10:45 pm
First of all American is in for a rude awakening, especially in the northeast and West coast regions of our nation. Second the American people is just as much to blame for the mess we are in as politicians are (Republican or Democrat). Third Obama and the congress are completely wrong how they are dealing with it and it will bring everyone down eventually. Fourth money from China is the only thing holding our government afloat right now. Fifth the money will dry up and Obama with his morons in Congress will be forced to monetize the debt and we will then be a third world nation. Each individual needs to get their own house in order and reduce debt as quickly as possible. Then hopefully each person will have enough to eat when the food shortages befall America within 2 years. Go ahead you Ivy League educated people laugh now and think some kook is writing this but keep these words in the back of your mind. There won’t be in America left to put your losing Marxist ideas in anymore and since most of you haven’t done a decent days work in your lives you will have it worse than us that have. Because we will at least have something to eat.
February 17th, 2009 at 11:38 pm
I never blog – I never comment on political issues on the web – I try to fly under the radar most of the time, but I am SO furious at all this I have to comment now …
We now have before us an 11-hundred page so-called “bailout package” that leaves the American taxpayer simply hung out to dry.
11-hundred pages of PORK … 11-hundred pages of some 787 BILLION dollars that will NEVER get used as intended … 787 BILLION dollars that will get used-and-abused, misdirected, raped, pillaged, stolen, sucked up by the wealthy and ….
AND Guess what ! .. the American taxpayer has to pay it all back … this is a LOAN !!! .. not a gift !!
The decline and FALL of the American Empire is at hand .. BEWARE … run for your lives !!!
February 18th, 2009 at 10:10 am
Obama so far is continuing the same economic policies of Bush. I can detect little difference. None of this will stop republican suck-ups from blaming it all on Obama, and democrat suck-ups from blaming it all on Bush.
re: the sky is falling. I don’t know – even though we are selling ourselves down the river, we still have about 1/4 of the production capacity of the entire world here in the USA, including food and manufacturing. So I don’t see how we all starve or whatever.
March 5th, 2009 at 11:16 pm
Actually IO think a case can be made to hold current budget policy responsible for the decline in the stock market. Remember — stock prices reflect future corporate earnings, and few outside government has any faith in the current Washington planning.
Worse, even the CBO is saying (again) the stimulus plan will make us worse off in the future, and obviously discounts current stock prices — it would be crazy if things like this didn’t:
http://www.cbo.gov/ftpdocs/100xx/doc10008/03-02-Macro_Effects_of_ARRA.pdf