Monday, January 19, 2009

Keeping score.

Keeping score. This is one of the few chances we get to judge a pair of opposing-party, two-term presidents back to back. We limit our judgment to objective, quantitative, market-driven data.

If the sum total of Americans assets is a portfolio, the president is like a portfolio manager — so let's look at how well they performed, using the Dow Jones Industrial Average as a yardstick.

PRESIDENT   DJIA Before   DJIA After     8-YR CHANGE

Clinton       3,255.99     10,587.59     + 325.2 percent

Bush 43       10,587.59     8,281.22     - 21.7 percent


To review: if you had invested $1000 in the Dow Jones Industrial Average stocks during Clinton's first inauguration, you would have had $3252 by Bush 43's first inauguration. The Clinton presidency gave you an average gain of 40.65 percent for each of his eight years in office.

If you had invested $1000 in the DJIA stocks during Bush 43's inauguration, you would have lost more than one out of every five dollars, leaving you with only $783 today. The Bush 43 presidency lost you an annual average of 2.72% for each of his eight years in office.

Similar results are obtainable with the S&P 500 index. The effect on the Nasdaq index is even more pronounced but we're ignoring it here because of the preponderance of 1990's Internet bubble stocks on that exchange.

Further observations along these lines are here.