The Case for Obama, Part 1: These "hard" economic times

There are two things I'm sick and tired of hearing about.  The first is that Obama and the Democrats are strong with voters on social issues, whilst Romney and the Republicans have the edge on economic and fiscal matters. In a word? BALONEY SAUSAGE. I've written plenty of posts in the past showing just how mush better things are under Democrats on purely economic terms, and [and this is the other thing I'm sick of hearing] "these hard economic times" are no different.  And don't expect the mainstream media to tell you any of this, but the fact is? Times ain't so bad. In fact, well... I'll let the data do the talking.

Exhibit A: The Dow Jones Industrial Average.  Generally considered one of the best indicators of overall economic health in this country.  Now, to put in context just what a wet, steaming pile of bullshit it is that people are talking about Obama like (1) he's done anything wrong, (2) that there IS actually anything wrong, and (3) that [even though it isn't wrong] it's all his fault, I want to start back a bit, to when George W. Bush took office, just to remind everyone what a shitty stock market REALLY looks like.  This is the DJIA from Inauguration day, 2001 to Election Day, 2004 (From Yahoo Finance):

Bottom line? DOWN 5.13%.  DOWN. Over FOUR YEARS! And that asshole got re-elected despite that!  Of course we all know how his second term fared.  Here's Election day, 2004 to Election day 2008:

Down 13.9%! And Conservatives wonder why Obama got elected? Conservatives are still trying to  argue that OBAMA destroyed the economy?! The DOW was down 13.9% in the four years since we reelected the guy under whom it had all ready fallen 5.13%!  Here's Bush's eight year term, Inauguration Day, 2001 to Inauguration Day, 2009:

Wow. DOWN 24.23%. Way to go, Georgie! Here's what's happened since Obama took office:

BOOM! UP! UP! UP! 66.4%! Wow! Now... I don't want anyone to get the idea that I think the President is directly, 100% responsible for the stock market, but... Let's not forget that the guys who are whining about "these hard economic times" are the guys who (1) got re-election after a 5% decline, and (2) were down over 24% by the time they were done.  And we're up 66% right now and I'm supposed to believe that it's THE OTHER GUYS who have the economic wherewithal?  Bullshit. According to the DJIA, Obama's done roughly three times the good in under four years than the amount of harm down by George W. Bush in EIGHT. 

Well, maybe the DJIA has a Liberal bias or something. I wonder what the S & P 500 looked like during Bush's first term:

Whoa. Down 13.16%. How the hell did that redneck get re-elected?! Is anyone goimng to seriously tell me that there's Liberal Bias in the media?!  Where was it in 2004?  Oh, and uh... How's things go the second time around?

Oh my God! DOWN 21.38%!  Almost as bad as the DOW. And people say Obama's presiding over a bad economy?!  Here was Shrub's eight year performance on the S & P:

Down 38.6%. Holy. Fucking. Shit. And since Obama took office?

And BOOM GOES THE DYNAMITE! UP SEVENTY FOUR POINT TWO-EIGHT PERCENT! Oh, yeah: Let's get rid of this guy!

The NASDAQ tells the same story:

Down 28.03%. That in just his first term folks! Can someone PLEASE tell me how John Kerry didn't beat this ass-clown in a LANDSLIDE?  Liberal Media, my hairy, unwashed ass!

Second time around:

Down another 19.2%. And they wonder why the lost. Must have been that Liberally biased STOCK MARKET. 

Overall, our roughly fifth worst President of all time managed to take a whopping 46.88% out of the NASDAQ during his tenure. Remember: This was the guy who mocked Al Gore's legislation that created the Internet.  OK, so how's the NASDAQ doing under Obama?

Up... One-Hundred... and... Thirteen... Percent.  Holy... Fucking... Shit... (I should have bought more!)  And really, to show how skull-fuckingly stupid (or just plain screwed) the Republicans are here, they keep trying to disappear George W. Bush's UTTER ECONOMIC FAILURES, every time Obama reminds people how bad things were under Bush. Thing is? The main reason that Obama's stock market has been as good as it was, is because it started in such a deep, dark hole! Saying that he came in essentially just at the right time, would be the easiest way for the Republicans to poo-poo his success. But, of course, they can't say THAT, because (1) they'd have to actually ACKNOWLEDGE his success, and admit that he also did the right things, and (2) they'd have to acknowledge Bush's FAILURE.

And... it's just easier for them to lie about it.  None of the Conservatively biased Mainstream Media is going to break from the narrative that the Right's strength is economics, (note: it isn't. they have no strengths) nor call out Fox News for going above and beyond in the field of outright deceit and propaganda.

OK, so admittedly the Stock Market MIGHT not be the best measure. (That sure was FUN for me to go through though, let me tell you!)  How about the GDP? Well, here's a chart:

It's from this article. My favorite part of which is the following line:

The average growth rate in private real quarterly GDP since 2000 has been 1.76%, so the private sector of the U.S. economy expanded in the first quarter of 2012 at twice the average rate over the last 12 years

I keep hearing about how slow, and sluggish and disappointing that 2.2% rate is, but "double the rate of the last twelve years?!" Seems like we're doing just fine in that regard as well.  BTW, you see those RED LINES?  Well, the Conservative Toadies in the Mainstream media won't tell you this, but... those are REDUCTIONS in Government Spending. And contrary to what the Macroeconomic Failures who drew up the Paul Ryan Budget will tell you: That's a drag on the economy.  So, if you think Obama should be doing more (meaning SPENDING more?) I'd agree with you 100%.  But that criticism sure as hell isn't a reason to vote Republican! And if you think he should cut more? Then you're either a Billionaire or an idiot who doesn't understand how economics works and will be out a job sooner than he thinks.

Speaking of which, unemployment is becoming so much NOT A PROBLEM, that Fox News has gone so far as to allege a conspiracy over the numbers!  Sarah Palin even questioned their accuracy!  Eric Bolling again accused the BLS of being partisan! Imagine the gall it takes, for a guy on FOX NEWS to accuse the BLS of partisan bias!  There should have been a quantum singularity forming in his crotch due to the gravity created by his massively HUGE BALLS.

Here's an unemployment chart that ought to get Obama re-elected:

Wow. Again what do we see? Things getting worse and worse and worse under Bush... And things getting better and better and batter, and the staying in the green under Obama.

Now, I'm going to look at energy and gas prices next, and I've never been shy about delving into social issues myself, but on a purely economic basis? Everything got worse under Bush, and everything has gotten better under Obama.  That not my opinion: That's what the data says. It's not a "liberal talking point" either: It's MATH.

If anyone needs a quick reference here you go:

As of 4/29/2012:

DJIA:
When Bush got re-elected: DOWN, -5.13%
Bush's Presidency: DOWN, -24.23%
Under Obama: UP, 66.4%

S&P 500:
When Bush got re-elected: DOWN, -13.16%
Bush's Presidency: DOWN, -38.6%
Under Obama: UP, 74.28%

NASDAQ:
When Bush got re-elected: DOWN, -28.03%
Bush's Presidency: DOWN, -46.88%
Under Obama: UP, 113.05%

I'm still stunned by this. Can you imagine what they'd be saying about Obama's economy if his markets had George Bush's returns?  Oh, yeah, but Bush gets re-elected after net first-term losses, and the so-called 'Liberal' media media keeps up the narrative that Republicans know their asses from their elbows when it comes to the economy.

One final note, regarding the millions of people still trying to find work.  In no way is my post here implying that your plight is not real. You're out of work. And no amount of economic data is going to put food on your table. (Of course... the Republicans want to kill anything that WILL do that as well.) The point here is WHY. WHY are there are so many unemployed people? And WHO, WHO is going to make things better and who will make them worst? History says the Republicans will make it worse. They're the ones who MADE IT BAD in the first place. And AUSTERITY won't fix anything. Obama has been embracing Austerity at an astounding rate, mainly to appease the Right, and it is the number one thing HAMPERING our economic recovery.  The Right will only give you more of he only thing Obama actually IS doing wrong economically. And that's not my opinion, or mere conjecture. I KNOW this because they've promised as much.  That's what massive SPENDING CUTS will do folks: Kill the economy. DO NOT give the Republicans this chance!

Occupy Reality, part one

The Dow Jones Industrial Average "soared" 330 points today.  What does that mean?  Well... nothing, actually.  But there's an interesting story to the DJIA when take in context.  Here are the numbers over the past two months:

From July 21st to August 8th it lost 1914.26 points.  That's... a pretty substantial drop.  Now... Seeing as how it had been an almost consistently upward trend for over a year leading up to that point - up 6097.27 points since its low, about six weeks or so after Obama took office.  So... What was going on during that time period that might have given the economy some jitters?  Hmmm.... Let me think...

OH YEAH!

The whole stupid DEBT CEILING DEBATE!  Thank you, REPUBLICANS! I mean, GOD FORBID the recovery happen when there's a DEMOCRAT in the White House!  Keynes might make a comeback or something!  (Of course, by stiflingng the stimulus packages, and seeing the recovery falter, they basically PROVED Keynes was right, but don't expect that liberal media (*barf*) to tell you that!)  They couldn't bear to see that Obama (and Keynes) were RIGHT, so they invented an issue in order to shit-can the economy.  Way to go, Republicans!

And since then, check it out:

UP 429.82
DOWN 519.83
UP 423.37
UP 125.71
UP 213.88
DOWN 77.707
UP 5.017
DOWN 419.63
DOWN 172.93
UP 37
UP 322.11
UP 143.95
DOWN 170.89
UP 134.72
UP 254.71
UP 20.7
UP 53.58
DOWN 119.96
DOWN 369.31
UP 15.04
UP 275.56
DOWN 119.05
DOWN 303.68
UP 68.99
UP 44.73
UP 140.88
UP 186.45
UP 75.91
DOWN 108.08
UP 7.65
DOWN 283.82
DOWN 391.01
UP 37.65
UP 272.38
UP 146.83
DOWN 179.79
UP 143.08
DOWN 240.6
DOWN 258.08
UP 153.41
UP 131.24
UP 183.38
DOWN 20.21
UP 330.06

Now, the trend? On average? Since, August 8th? Is DOWNWARD.  OK, yeah, the index is actually UP 193.41 points since the start period, but the trend-line says that we'll lose about 4.65 points per trading day.  The thing is?  Do you notice how many days there are that the CHANGE (up or down) was in the triple digits?  Because I did. Don't bother counting, I'm going to tell you: 32 out of 44.  That 72% of the time that the Index changed by roughly 1% of it's overall value.  To put that in context - a 1% change in a single day - if it went UP every day by 1%, in a year you'd have roughly THIRTEEN TIMES the money you started with.  Now, obviously, that's never going to happen.  Down days will cancel out up days and vice-versa.  But more than EVER OTHER DAY? THREE OUT OF EVERY FOUR?!  That's extraordinary.

So... what does it mean?

Well... You have to understand that the DJIA is nothing but a handful of stocks (30) that the Dow Jones Company picks because they feel that they are a good indicator of the countries overall economic health.  (It's actually one of THREE indices for this purpose, but it the only one anyone every talks about, so it's what we're going to talk about.)   And you also have to understand what a stock's price actually means.  What it is, is the net present value (which assumes some arbitrary inflation rate) of all future dividends (profits) divided by the number of shares.  IOW, it's a predictive value of how a company will do.  And, obviously, as new information comes in (like quarterly reports?) both that projection, and the price, will change accordingly.

So... what does it mean that "the experts" keep changing their prediction by such a significant amount every day, up and down? 

Well, for a start, it may seem that they don't what the hell they're bloody doing! But ACTUALLY, it merely means that there's a lot of economic instability at the moment.  Now the Republcians will balme it on all kinds of things that eitehr haven't happened yet (like tax increases) or things that have no chance of happeneing. (Like tax increases.)

But I have an alternate theory, and it's fairly simple.

The economy is trying to recover.  It really wants to.  There is pent up demand and people are starting to spend money again. Sales of Halloween Candy/Decorations/Cosutems/etc..., for example, is WAY up from the last two years.  I can tell you that Automotive sales (and profits) are generally up as well. But then...

HERE COME THE REPUBLICANS...

Debt crisis = higher interest rates = harder to borrow = lousy economy
No More Stimulus = hampers demand = lousy economy

Raise taxes on THE POOR (a favorite of Fox News these days!) = hampers demand = lousy economy
Cut Social Security and Entitlements = hampers demand = lousy economy

Cut Government Salaries and jobs = hampers demand = lousy economy


You see the trend?

The ECONOMY? Would be doing just fine if the Republicans did what they always say the Government should do: STOP FUCKING WITH IT!

All of this instability is due to Washington's (read: REPUBLICANS) refusal to simply DO WHAT IS NECESSARY to make things better.

Now... You might hear the Right tell you that their thinking LONG TERM instead of SHORT TERM.

To which I'll answer, "Yeah..." and point out that, to a Republican, "Short term" means the next fourteen months, while "Long term" meand 2013 through 2016.

If I had my way, I'd execute every one of these scumbags for treason. As it is, they should be impeached and jailed for theft, fraud and corruption. But, at a minimum? THEY SHOULD ALL BE VOTED OUT OF OFFICE. EVERY LAST MOTHERFUCKING ONE OF THEM!

I've said it many times on MMFA, and probably once or twice here, and I'll say it again:

Anyone making less than $250,000 a year who votes Republican is either clinically psychotic or functionally retarded.  The rest? Are just greedy.

Who does better with the economy?

The economy is something the right likes to harp about all the time but, just like everything else, really has no credibility on. I guess the thinking goes that since all the successful CEO’s are Republican (not true, but whatever), and they all know how to run COMPANIES (like, you know… Enron, General Motors and Citibank?) then the Republicans MUST be better at “running the economy.” Couple problems with that… First off all, the vast majority of Republican politicians, like most politicians in general, are LAWYERS, not businessmen. Second, a company is to the economy what today’s weather is to the climate – the two are related, but a thorough understanding of one or the other requires a completely different skill set. (Go figure that they aren’t on the right side of the global warming debate either!)

Now… it should be clear why these "successful" CEO’s "all" vote Republican: Republican generally don’t put as many regulations on industries and prefer the lesse-faire approach. That this approach has ALWAYS ended in disaster is apparently lost on them, but the CEO’s seem to think they’ll make more money under Republicans.

But will the economy do better?  (Will we keep our jobs? Will our investments grow?)

Let's take a look at how the economy has performed under Democrats and Republicans using two of the most common economic indicators: The Dow Jones Industrial Average and the Standard and Poores 500 Index. Here’s how the experiment will work. We’ll hypotyhetically put $1000.00 on the market when one party takes the White House, sell it when they’re voted out, and put it all back in when the regain power. We’ll then calculate what you’d have today if you’d done this over the years. The two strategies will be called “Betting on the Dem’s” and “Betting on the Pub’s.”

I was able to find DIJA data going back to 1900. We’ll do the Pub’s first. The idea is that you’ll BUY udner McKinnley, SELL with Wilson, BUY with Harding, SELL with Roosevelt, BUY with Eisenhower, SELL with Kennedy, etc… through to the present day, when you would SELL when Obama took office. And I’m going to show 6 different scenarios, depending on which President you want to start with. Also, it should be noted that I’m using the Jan-1 closing data, rather than the day they actually took office. This is because that’s the only data I have. If I can find some more precise data, date-wise, I’ll re-calculate it. Here is the data I’m using:

Date:_____DJIA: _____Incoming (Incumbant) Presdient:
2/12/2010_10,099____(Obama-D)
1/1/2009__8,000_____Obama-D
1/1/2001__10,887____Bush-R
1/1/1993__3,310_____Clinton-D
1/1/1981__947_______Reagan-R
1/1/1977__954_______Carter-D
1/1/1969__945_______Nixon-R
1/1/1961__648_______Kennedy-D
1/1/1953__290_______Eisenhower-R
1/1/1933__51________Roosevelt-D
1/1/1921__72________Harding-R
1/1/1913__88________Wilson-D
1/1/1900__68________(McKinley-R)

Using this data, and calculating the number of shares and values you’d have at each stage, if you used the “Bet on the Pub’s” strategy, starting with McKinley, your $1000 would be worth $5311. today. If you started under Harding, your $1000 would be worth $4104 today. If you started under Eisenhower, your $1000 would be worth $5794 today. If you started under Nixon, your $1000 would be worth $2593 today. If you started under Regan, your $1000 would be worth $2568 today. And for the poor saps who thought they’d bet on George W. Bush, their $1000 would be now worth only $735. Now… these returns account ONLY for the growth under Republicans. If you figure out the number of year involved (starting date through 1/1/2009) and calculate the annual rate of return [ (Final value / Initial Value) ^ (1 / number of years) -1 ] you get the following, based on which President you start with:

McKinnley: 1.5%
Harding: 1.6%
Eisenhower: 3.2%
Nixon: 2.4%
Reagan: 3.4 %
Bush: -3.8%

Here’s how “Betting on the Dem’s” performed: Starting with Wilson, your $1000 would be worth $28,089 today. Starting with Roosevelt, your $1000 would be worth $34,341 today. Starting with Kennedy, your $1000 would be worth $6038 today. Starting with Carter, your $1000 would be worth $4140 today. Starting with Clinton, your $1000 would be worth $4171 today, and starting with Obama, your $1000 would be worth $1268 today.

Figuring the yields the same way, (only going through to the TODAY, rather than ending on 1/1/09) you get this for the Dem’s:

Wilson: 3.5%
Roosevelt: 4.7%
Kennedy: 3.7%
Carter: 4.4%
Clinton: 8.7%
Obama: 23.7%

That’s right – the WORST CASE scenario under the “Betting on the Dem’s,” (Wilson, 3.5%) still gives a better return than the BEST CASE scenario under “Betting on the Pub’s,” (Reagan, 3.4%) So according to the DJIA, the economy not only does better under Democrats, it does much, MUCH better!

But who knows… MAYBE the DJIA has a liberal bias or something. So how about the S&P 500? Now, the S&P only goes back to the 1950’s. So we’ll start with Eisenhower. Here’s the raw market-close data:

Date:_____S&P:___Incoming (Incumbant) President:
2/12/2010_1078___(Obama-D)
1/1/2008__826____Obama-D
1/1/2001__1366___Bush-R
1/1/1993__439____Clinton-D
1/1/1981__130____Reagan-R
1/1/1977__102____Cater-D
1/1/1969__103____Nixon-R
1/1/1961__62_____Kennedy-D
1/1/1953__26_____Eisenhower-R

And here we go again. If you started with Eisenhower, your $1000 would be worth $4822 today. If you’d started with Nixon, your $1000 would be worth $2022 today. IF you’d started with Reagan, your $1000 would be worth $2042 today. And the poor sap who bet on George W. Bush would only have $605 left of his initial $1000 investment. Using the same formula, here are the returns, starting with:

Eisenhower: 2.8%
Nixon: 1.8%
Reagan: 2.6%
Bush: -6.1%

Back to the Dems… If you’d started with Kennedy, your $1000 would be worth $8598 today. If you’d started with Carter, your $1000 would be worth $5176 today. If you’d started with Clinton, your $1000 would be worth $4061 today, And betting only on Obama, your $1000 would be worth $1305 today. So, again, using the same formula, here are the returns, starting with:

Kennedy: 4.5%
Carter: 5.1%
Clinton: 8.5%
Obama: 27.0%

AGAIN, the worst case scenario under the “Dem’s” strategy (Kennedy, 4.5%) is STILL better than the best case scenario under the “Pub’s” strategy (Eisenhower 2.8%).

Now... Obama's market is obviously still in play, and so the final Democratic returns can vary.  But as it stands right now… if you want to be better off financially, you’d better do what you can to help the Democrats WIN!


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BTW… there are some flaws with this whole exercise. I’m not going to point them out yet, since I’m not particularly motivated to go help the Right bolster their case here. (Plus I'm just curious to see what any of them come up with.) However, I have been challenged with several pretty clever arguments given to me by Conservatives, pointing some of these out in an attempt to undermine this, and the conclusion still stands. Maybe some conservative who knows what’s what will eventually shoot something my way that will stump me. But I’m not holding my breath!

Also, I’d be happy to explain how I calculated any of the above returns, if anyone does their own number-crunching and comes up with a different number. I’ve tried several different methodologies and they all give the same final answer: Dem’s rock, Pub’s are the suck. This is just the one that I felt was most defensible.