Political parties and the economy

Republicans are usually pro-business, but the democratic presidency has better track record for the market.

As for the stock market, the Dow index is up 56% (from 7,949 to 12,418) in the less than 3 years since the day that Obama took office. If you still collect unemployment or your house has been foreclosed, you're still in deep trouble.

The S&P500 performance under Republicans vs Democrats since 1926:
Annualized return under Democratic presidenci­es: 13.74%
Annualized return under Republican presidenci­es: 6.25%

Mitt could trigger a trade war with China, and we would be back to the recession.

The president's appointees for the economy are the ones to watch as they set up the policies. Today interest rate is not a factor as it cannot go much lower. The cut in military expenses is good for the economy.

The problem of two major political parties is they do not agree with each other, so they have to make too many compromises and waste a lot of time and effort. To illustrate, if Obama is re-elected, he will have a hard time to deal with the Congress that is controlled by a party opposite to his.

For a joke, click the differences between a prostitute and a politician.

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It is easy to measure how the market does during the presidency. However, it is not easy to measure the economy. Here is one effort:

Alan Blinder, the Princeton economist, had a great article in the NYT back on August 30, 2008. It pointed out that in the 60 previous years, Republicans held the presidency for 34 years and the democrats for 26. Growth in the economy averaged 1.64 percent per capita under Republican presidents versus 2.78 percent under Democrats. Professor Blinder pointed out a second fact: Over the entire 60-year period, income inequality trended substantially upward under Republican presidents but slightly downward under Democrats, thus accounting for the widening income gaps over all. Growth in inequality is an obvious drag on overall economic growth, for if the middle and lower classes don't have the spending power, growth in demand will lag.