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Looking at the Clinton and Bush Presidencies and the Stock Market
By JLP | February 11, 2008
For fun, I put together some charts to comare the Clinton presidency and the Bush presidency and the performance of S&P 500 and Dow Jones Industrial under each:
When looking at the Clinton and Bush presidencies and the performance of the stock market under each, In my opinion one thing is clear: Bush got the short end of the stick. He became president 300 days into a bear market that began on March 24, 2000. Then, only nine months into his presidency, the country was hit by 9-11. I’m not saying President Bush was the best president we ever had, but I do think that we would have faced a stumbling market NO MATTER who was president, just like we would have had the 90s internet bubble regardless of who was president.
That said, my guess is that economic history will not be kind to President Bush.
Topics: Investing | 23 Comments »
February 11th, 2008 at 10:47 pm
Two points:
1. The stock market is not the economy.
2. A President’s influence on the economy is quite limited.
February 12th, 2008 at 9:29 am
I cannot believe how you guys support our pres,after going through so much.
Hats off to you guys. you are great!!!!
CP
February 12th, 2008 at 10:39 am
President has lot to do with how economy progresses. 2 Major economic catastrophes – savings and loan crisis and Current Sub prime Mortgage crisis came during republican presidencies.
From wikipedia
Lincoln Savings and Loan
The Lincoln Savings led to the Keating five political scandal, in which five U.S. senators were implicated in an influence-peddling scheme. It was name for Charles Keating, who headed Lincoln saving and made $300,000 as political contributions to them in the 1980s. Three of those senators – Alan Cranston, Don Riegle, and Dennis DeConcini – found their political careers cut short as a result. Two others – John Glenn and John McCain – were rebuked by the Senate Ethics Committee for exercising “poor judgment” for intervening with the federal regulators on behalf of Keating.[12]
February 12th, 2008 at 11:12 am
sunil shah,
You conveniently left out the internet bubble that occured under Clinton’s watch. It was a bubble just like the subprime mortgage and real estate bubble we’re going through now.
February 12th, 2008 at 11:24 am
It’s quite clear that Clinton was good for the market, and Bush was bad. Charts don’t lie.
February 12th, 2008 at 2:59 pm
As important as the market, what about the national debt? Clinton made paying it down a priority; Bush nearly doubled it.
February 12th, 2008 at 5:32 pm
Clinton economic positives: NAFTA, debt retirement, welfare reform
Clinton economic negatives: higher marginal tax rates, massive ag subsidies, bought by industry lobbyists
net effect: slightly positive
Bush economic positives: expanded trade agreements, lower marginal tax rates, lower cap gains taxes
Bush economic negatives: deficit spending, massive ag subsidies, bought by industry lobbyists
net effect: slightly positive
End result: feh.
February 12th, 2008 at 11:57 pm
I think it’s pretty clear that you can read things however you want to read them, depending on your political affiliation. If you’re a Bush fan, Clinton rode a wave of positives and left Bush with a bad hand. If you’re a Clinton fan, Bush came into the White House and destroyed everything. I think the reality is that people need to figure out the truth of the economic situations during both presidencies, and not try to blame the other party’s guy for what they did or didn’t do in 8 years–in which both President’s should be blamed and take credit for during that time.
February 28th, 2008 at 8:09 pm
Under Clinton the DOW (where most of the money is) went up from around 3,300 to over 10,000 (A 300% INCREASE).
If the average investor pulled his money out he would’ve been able to buy 3 TIMES AS MUCH WITH IT as when Clinton came in.
Stock brokers at the time indicated the market LOVED A BALANCED BUDGET.
Under Bush the DOW has been flat. And the price of gas, electricty, milk, meat, fresh fruits & veggies have all more’n doubled.
If you pull your money out under Bush it’ll only buy half as much — thanks to an illegal war causing massive deficits & massive borrowing form China & pissing off other countries.
BUSH HAS DESTROYED THE DOLLAR.
February 28th, 2008 at 9:03 pm
Dillon,
And how much of that 300% increase in the Dow was due to the bubble? That bubble burst right before Bush took office so it’s not really fair to put that all in Bush’s hands.
How exactly is the increase in food prices, Bush’s fault?
March 1st, 2008 at 5:48 pm
The actions of a president do not necessarily dictate the influence but it is the policies that the administration supports that comes from the House or the Senate. The Repblicans dominated the House and the Senate during the Clinton Administration. Then the Democrats took it back during Bush Administration. How many shallow people live in this nation???? You have to look past the President people. Economics 101 – the people dictate the market. Right now we have a ton of people racking up debt. This has created false demand over the last 40 years. Wait until the credit industry fails, which it is already happening with the start of the mortgage issues. Most likely, that crash will be inherited by the next President. I guess shallow Americans will blame that President as well. WAKE UP AMERICA! Let us not be focused on the short term but the long term. Republicans focus on the long term and not the short term. Democrats focus on the short term so they can get reelected. All they care about is power not the people. FDR ruined our economy. He created social security and all the other New Deals that screwed the nation. Everything sounds good in the short term but always bites you in the long term. All Democrats are for increasing minimum wage – when they do that it causes inflation that offsets the increase. Morons. Do they not learn that the market must regulate itself? Lets tell Washington to stick to the infrastructure, upholding the laws not creating more, and keeping us safe. How hard is that???
March 1st, 2008 at 5:51 pm
Oh and by the way, Americans have destroyed the dollar because they voted morons in to office who have tinkered with the markets. Oh no, we are heading in to a recession. Heaven forbid the market regulate itself!
March 19th, 2008 at 3:50 pm
Regarding “Independent George’s” comment; He may want to consider that:
The president (especially one who has a house and congress that side with him as Bush has had up untill recently) has CONTROL OVER LEGISLATION!
What does this mean? In Bush’s case, that anyone who has a few $$ to slip him can have legislation (Tom DeLay aka “The Hammer” will kick it off) passed THAT FAVORS HIS CORPORATION. Some examples may be CEOs of corporations that wish to send U.S. jobs overseas. They can be assured that if they “pay up” preferably discretly via a Caymen Islands account or similar, no tarrifs will be levied and you may even be able to clear the way for H1B and L1 Visas, etc.
Big oil can get hold of a massive oil producing country (don’t worry, just head over to the Vice presidents house, and you and your other CEO buddies can dive up the oil fields of that country and the Commander in Chief in your pocket will do the rest)!
August 26th, 2008 at 10:56 am
Look at the charts again folks. If you look at where the DIA is at the lows of the Bush years it is still up over 100 percent from where Clinton took over. Same for the S&P. But I guess some idiots would consider that a positive argument for Bush.
August 26th, 2008 at 11:06 am
Also as far as any similarities with the Tech Bubble of the late 90s and todays housing bubble of are concerned. The only people who lost their houses as a result of the tech bubble bursting were the Jack Ass day traders who’s method of picking stocks was to play pin the tale on the donkey with a page of the wall street journal.
August 26th, 2008 at 11:12 am
Chris W wrote:
“The only people who lost their houses as a result of the tech bubble bursting were the Jack Ass day traders who’s method of picking stocks was to play pin the tale on the donkey with a page of the wall street journal.”
Not so. What about all the people who worked for the tech companies that went under? What about all the people who lost everything when the bubble went bust?
September 1st, 2008 at 3:17 pm
JLP asked: “And how much of that 300% increase in the Dow was due to the bubble?”
not much, the tech bubble inflated Nasdaq, that’s where the tech stocks were mostly located.
September 20th, 2008 at 8:38 pm
[...] Looking at the Clinton and Bush Presidencies and the Stock Market | AllFinancialMatters __________________ "No nation could preserve its freedom in the midst of continual warfare." (– James Madison) [...]
October 9th, 2008 at 2:56 pm
You have got to be kidding. Kind of like saying the guy with the matches had the bad luck to be in a fire.
November 19th, 2008 at 1:04 am
I think an incorrect view of the 90’s economy is to say it was driven by the dot com bubble. It’s true people overinvested in internet companies, but some of these companies survived, and successful new ones have been created as well. The internet is still used as a successful business tool and helped drive the incredible increases in worker productivity in the 90s. It is an example of technological development driving human economic progress. Its effectiveness did not end with the bursting of the dot com bubble. Also comparing the dot com bubble to the housing bubble does not make sense, different bubbles for different reasons. And different outcomes.
On another point, Presidents don’t have that much control over economic activities in a free-market system. But policies still matter. It is reasonable to me to assume that budget deficits or surplusses do matter for overall economic growth. Certainly we’ve put our economy and currency under stress by increasing the national debt. Certainly smart regulation of financial markets could have prevented the current crisis. Possibly investments in clean energy technologies could have pulled money away from the housing market and dulled its negative impact. Just some thoughts.
January 14th, 2009 at 10:09 am
Funny that this was a topic at the tippy top of the W Administration’s economic gains. Wonder what this will look like at the end of his term. Hey, maybe George Sr wouldn’t mind a second term. At least in terms of the economy, his kid sure made him look good.
March 5th, 2009 at 1:48 pm
[...] she knows – that her one-trick pony hopped on a ship that’s been launched to sail over and over again and over [...]
May 18th, 2009 at 9:01 pm
That's right, if Clinton won a third term the internut boom would have kept going forever.
And when NFC teams win the superbowl the market does better too. Charts don't lie.