culture, politics, commentary, criticism

Monday, October 15, 2007
We are not better off today than we were seven years ago. Focus with me on the American economy for just a moment. A look at the stock markets makes the case that the Republican Party is no longer the party of business, thanks to the disastrous presidency of George W. Bush (William H. Wood,
Let's look at the nominal growth in the Dow Jones Industrial Average, the S&P 500 and the Nasdaq stock indexes during the George W. Bush presidency: DJIA, up an average of 4.3% a year, or a cumulative 33.0% total; the S&P 500, up 2.3% per year, 16.4% total; the Nasdaq, up 0.2% per year, 1.5% total. [...]

Revise the three indexes' returns to account for both the value of the dollar in euros and Europe's harmonized index of consumer prices and you get an even worse picture. Using this approach, the DJIA lost an average of 3.9% a year, declining a total of 23.3%; the S&P 500 dropped 5.8% annually, for a loss of 32.9% in all; and the Nasdaq forfeited 7.7% a year, or 41.5% in total.

In other words, a euro-based investor in the Dow has, after adjusting for European inflation, lost 3.9% (excluding dividends) per year in real terms during the Bush presidency. In a global economy in which America depends on foreign investment, this relationship is untenable.

These rates of return are far more ominous when adjusted using the cost of either oil or gold instead of the inflation-adjusted euro value of the dollar. The annually compounded rate of return on the Dow Jones Industrials since January 2001 (excluding dividends) has been -9.8% when adjusted for the price of oil and -10.5% when adjusted for the price of gold.

Many would argue that the market's recent volatility is, in part, the consequence of efficient-market forces trying to reconcile these imbalances. It is reasonably certain that a sinking currency and rapidly rising commodity prices will ultimately lead to substantially higher prices and/or higher interest rates, which will further weaken the domestic equity markets.

The U.S. dollar has enjoyed a pre-eminent international position for most of the last century. The economic forces unfolding before us have the power to undermine that authority and to inflict grave financial hardship upon us as a nation.

When we think about the upcoming presidential election, we should listen carefully to what the candidates are saying -- if anything -- about the collapse of the American equity markets. Our future depends upon the health of those markets, and no candidate should receive our vote if he or she doesn't recognize the problem we face and show a willingness to correct the great damage that has already been done.

We are not better off today than we were seven years ago.
One mo' time: Adjusted for oil prices, the stock market has lost 10 percent a year since Bush-Cheney stepped into the White House.

These are the same people who tried to privatize Social Security — yet that political strategy might at least have made economic sense under Clinton, when the Dow Jones Industrial Average gained a total of 350 percent over his two terms. This is worth repeating as often as necessary — under Bush, national wealth was lost; under Clinton, national wealth skyrocketed. As we have seen time and time again, Democrats are good for business in reality, as opposed to in soundbites.

If you think of the American economy as a portfolio, then Bush has been a complete and utter failure as a portfolio manager. Pro-business Republicans everywhere should be ashamed of having given him their support, for he has not only destroyed their credibility as a party for the positive potential of capitalism, but he has also literally erased principal out of their investment accounts. Negative ten percent a year, to be exact, thanks to oil prices. It turns out that holding hands with Saudi princes doesn't make you any more effective when it comes to managing oil prices — it obviously makes you less so — but starting Middle Eastern wars based on false premises sure messes up the stock markets.

For American voters who want a better economy, there is no other choice. The Democratic Party is now the party of business — they have won the title by default.

Greatest Hits · Alternatives to First Command Financial Planning · First Command, last resort, Part 3 · Part 2 · Part 1 · Stealing $50K from a widow: Wells Real Estate · Leo Wells, REITs and divine wealth · Sex-crazed Red State teenagers · What I hate: a manifesto · Spawn of Darleen Druyun · All-American high school sex party · Why is Ken Lay smiling? · Poppy's Enron birthday party · The Saudi money laundry and the president's uncle · The sentence of Enron's John Forney · The holiness of Neil Bush's marriage · The Silence of Cheney: a poem · South Park Christians · Capitalist against Bush: Warren Buffett · Fastow childen vs. Enron children · Give your prescription money to your old boss · Neil Bush, hard-working matchmaker · Republicans against fetuses and pregnant women · Emboldened Ken Lay · Faith-based jails · Please die for me so I can skip your funeral · A brief illustrated history of the Republican Party · Nancy Victory · Soldiers become accountants · Beware the Merrill Lynch mob · Darleen Druyun's $5.7 billion surprise · First responder funding · Hoovering the country · First Command fifty percent load · Ken Lay and the Atkins diet · Halliburton WMD · Leave no CEO behind · August in Crawford · Elaine Pagels · Profitable slave labor at Halliburton · Tom Hanks + Mujahideen · Sharon & Neilsie Bush · One weekend a month, or eternity · Is the US pumping Iraqi oil to Kuwait? · Cheney's war · Seth Glickenhaus: Capitalist against Bush · Martha's blow job · Mark Belnick: Tyco Catholic nut · Cheney's deferred Halliburton compensation · Jeb sucks sugar cane · Poindexter & LifeLog · American Family Association panic · Riley Bechtel and the crony economy · The Book of Sharon (Bush) · The Art of Enron · Plunder convention · Waiting in Kuwait: Jay Garner · What's an Army private worth? · Barbara Bodine, Queen of Baghdad · Sneaky bastards at Halliburton · Golf course and barbecue military strategy · Enron at large · Recent astroturf · Cracker Chic 2 · No business like war business · Big Brother · Martha Stewart vs. Thomas White · Roger Kimball, disappointed Republican poetry fan · Cheney, Lay, Afghanistan · Terry Lynn Barton, crimes of burning · Feasting at the Cheney trough · Who would Jesus indict? · Return of the Carlyle Group · Duct tape is for little people · GOP and bad medicine · Sears Tower vs Mt Rushmore · Scared Christians · Crooked playing field · John O'Neill: The man who knew · Back to the top

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