CNBC Editor blames Obama's Stimulus for recent stock woes

Major · Mar 23, 2009

Odd that this thread went silent...

Scarface281 · Mar 23, 2009

The Dow up almost 6% and over 400 points. Impressive.

SamFisher · Mar 11, 2010

I'd like to hear from the original poster on this thread, we're about a year later.

SamFisher · Apr 5, 2011

SamFisher said: ↑

I'd like to hear from the original poster on this thread, we're about a year later.
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We're over 2 years later now into a massive bull market which started (edit: 3 days or so) after this editorial was published, would really like to see if anybody followed this advice.

SamFisher · Mar 8, 2013

Bumping to commemorate the 4 year anniversary of Obama's stimulus destroying the stock market.

Where is the accountability for this idiot in the thread who wrote the idiotic article?

Answer at Fox Business News.

CrazyDave · Mar 8, 2013

When the rhetoric is deliberately embellished, the feeling that one should explain later when proven to be utterly and completely wrong is lessened, if not deliberately ignored.

SamFisher · Dec 24, 2014

Regarding a relatedly terrible op-ed lodged at the same time as the OP here, let's go to the numbers:

Hee hee.

chrispbrown · Dec 24, 2014

bigtexxx said: ↑

Another day, another massive drop for the markets. Every time Geithner opens his mouth the market takes a dump.

....but....I thought Barack said that stocks are "potentially a good buy, if you have a long term horizon". I feel that hope, brother. I feel it.
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Seems he was correct here...

g1184 · Dec 24, 2014

Related to that Dow Jones graph, there's a study that shows the stock market has historically fared better under Democratic leadership, summarized by PBS:

link

During the past 16 presidential terms, Republican presidents have presided over 41 quarters classified by the National Bureau of Economic Research as recessions. Democrats? Only eight.

If businesses and Wall Street, particularly, prosper under Democratic administrations, why has the GOP traditionally won their support? (Compare the top bundlers for Mitt Romney and Obama for a 2012 refresher.) Ignorance of this Democratic growth trend is one answer, according to the lead author of the provocative new study, just out this week.

[...]

But that average growth has been so much higher under Democratic presidents was surprising for another key reason that still baffles Blinder: Constitutionally, the American president just doesn’t have that much control over the economy. “No one knows this better than Barack Obama,” he said, noting that Congress has blocked the president’s efforts to stimulate the economy.

[...]

The bigger, more troubling question, which Blinder and Watson try to address in this paper, is why?

The obvious explanation for partisan-variant performance, Blinder said, would be monetary and especially fiscal policy, since the latter is explicitly political. But the partisan difference there was small and not necessarily in Democrats’ favor, with some Republican policies stabilizing the economy more. That brought them no closer to an answer.

Next, the authors considered variables that might not be policy-related, or at least not directly. They moved from looking at “good policy” to “good luck” variables, although Blinder admitted the line between them is fuzzy. For that, they turned to history. The most salient variable they found was oil shocks.

Everyone knows, Blinder said, that when oil prices go up, it’s bad for the American economy. Oil prices have gone up more under GOP presidents. That could be just bad timing for those chief executives. But it could be linked to policy — more likely foreign policy — as when George W. Bush’s invasion of Iraq provoked what Blinder called “long-lasting and severe” oil shocks.

Even earlier, the economic growth in Richard Nixon’s second term came to a halt with OPEC I in 1973; the oil shock contributed to slower growth under Nixon-Gerald Ford, compared to Kennedy-Johnson, the authors write. Oil shocks also fed Jimmy Carter’s inflationary woes in the late 1970s, although his administration still saw higher real GDP growth than under Ford.

Productivity shocks are the second biggest explanation for the partisan gap, said Blinder; productivity contributes more to growth under Democrats than Republicans. Once again, though, some of that is just luck; the Clinton administration, for example, coincided with the commercialization of the Internet.

The third factor is foreign economic growth. When Europe grew faster, for example, so did the United States. It just so happened that Democrats occupied the White House during more favorable international economic periods.

The final factor is what Blinder called self-fulfilling prophecy. That is, if Americans know the economy grows faster under Democrats, they might buy and produce more products to make that happen. Of course, Blinder said, that idea “is slightly puzzling since 10 minutes ago, I was talking about people not knowing this phenomenon” — higher growth under Democrats — even exists.

Here’s where more luck, in the research department anyway, is needed. These “luck” factors account for only about half the 1.8 percentage point observed gap; the remaining explanation, Blinder and Watson write unequivocally, is a mystery.
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CNBC Editor blames Obama's Stimulus for recent stock woes

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