That’s an excellent question. It was posed in the title of a piece at The Hill by former political strategist and current CNN commentator James Carville.
Carville’s most notable claim to fame was his role in catapulting an obscure and not terribly successful saxophone-playing Arkansas governor to the presidency in 1992, which is documented in the film “The War Room.” Carville failed to catch lightning in a bottle a second time in 2008, when he served as Hillary Clinton’s campaign manager.
The man to whom she lost had even less experience in politics than her husband, which would seem logically to be the basis of Carville’s title question. It’s not. Carville, who is a Democrat, is left scratching his head over the recent midterm shellacking of his party cum referendum on the Obama presidency. Here is the crux of his argument:
I have no earthly idea why a stock market investor would vote Republican — all you have do is look at the numbers. The numbers are staggering, breathtaking and unimaginable. How anyone with even a penny in the market would vote for their interests and choose a Republican is unexplainable.
Since Obama was sworn in on Jan. 20, 2009, Standard & Poor’s 500 index has gone up approximately 115 percent, the Dow Jones industrial average has experienced a growth rate of 146 percent and, perhaps most impressively, Nasdaq has grown in size by 188 percent. Two thousand days into his presidency, the major stock indexes under Obama have had average gains of 142 percent—compare that to the record under Reagan, who saw gains at 88 percent during that same time period.
Russ Britt of MarketWatch notes, “the average stock-market gain under four post-Depression Democrats through each one’s 2,000th day in office has outpaced the average gain of the four Republicans in the era by a factor of nearly 4 to 1. Democratic gains have averaged 133%, while Republican market advances have had a mean of 33%.”
First of all, there is abundant evidence that presidencies do not drive the market:
“Over the past century, which party occupies the White House has had no discernible or consistent impact on US equity markets,” writes Russ Koesterich, CFA, global chief investment strategist for BlackRock’s iShares ETF business. “Presidential election years generally have coincided with favorable markets, particularly when the incumbent party wins,” says T. Rowe Price. In a 2008 blog posted titled “Presidential Elections and the Stock Market,” Pete Davis concluded that “most of the studies show quite an advantage for equities following the election of Democrats, but a Federal Reserve study concludes there is no consistent relationship if you correct for market volatility and test back to 1852.”
Recent gains in the market, moreover, have been largely attributable to quantitative easing and eventually that bubble will burst.
Then there’s the national debt. Is Carville really unaware that Obama has accrued more debt than all the previous presidents combined? Currently, national indebtedness works out to more than $140,000 per household and is growing daily.
Finally, Carville is highlighting an economic fact that Obama himself has strenuously avoided for most of his presidency because it sends the wrong message: that the rich, who have the money to invest, are getting richer, while the poor are getting poorer.