How to Twist Numbers to Make Obama Better on Economy than Trump
"The Dow," shorthand for the Dow Jones Industrial Average, is usually what people are talking about when they refer to "the market" — i.e., the stock market. The DJIA, the symbol for the Dow, seems to be cited more often than other averages and indices, such as the Nasdaq Composite, the S&P 500, and the Russell 1000, even though it consists of only 30 stocks. Some think of the Dow as a measure of the health of economy.
On Dec. 26, USA Today ran "How the stock market performed under every president for the past 100 years" by Samuel Stebbins. The study had run six days earlier at 24/7 Wall St. (italics added):
24/7 Wall St. reviewed the change in the DJIA under every president since the end of WWI. The Dow's performance was measured by calculating the percentage change of non-inflation adjusted month-end closing values from each president's first month in office to his last.
The lack of specificity is bothersome. Does the study key off the closing values on each president's first and last full months? Stebbins doesn't say. Why not key off Inauguration Day and end with the last full day in office? Sorry if that's being a mite too picky, but the real problem with this study is its lack of context, some of which I'll try to supply.
Another indicator that could be considered is how many record closes happened under each president. For that, refer to "Closing milestones of the Dow Jones Industrial Average." To see how many record closes were made for any year, click on selection 5 in Contents, "Complete list of record closes," and then click on the "show" buttons on the right margin to see the records and the dates they were set. Notice that no record closes for the Dow were recorded from 1930 to 1953. Indeed, the record set on September 3, 1929 wasn't broken until November 23, 1954.
So, for more than 25 years, through the entire presidencies of FDR and Truman, the Dow had no new record closes. Despite that, Stebbins gives FDR a rating of 198.6 percent and puts him third on his list, just behind Coolidge and Clinton. Of course, this dearth of record-setting closes on the Dow is partly due to how very low the index had fallen before FDR's first day in office.
What was true for FDR also applies to Barack Obama, as the Dow had no new record closes from 2008 through 2012, which encompasses Obama's entire first term. The complete stretch was from October 9, 2007 to March 5, 2013. Only in 2013 did the Dow begin to forge ahead into new territory. If we look at the new ground trod by the Dow under Obama, we must start at Bush's close of 14,164 set in 2007 and end with Obama's highest close of 19,974.
That's a difference of 5,810, and it's 41 percent higher than Bush's highest close. But by keying off Obama's first and last months, Stebbins can say the Dow went up by 148.3 percent and then put Obama fourth on his list, right after FDR. Also notice that the highest Dow closes under Obama occurred after the 2016 election on Nov. 8. In fact, 17 record closes were set in the remainder of 2016.
Here's where Trump beats all the other presidents. Trump's first year, 2017, had the most record closes of any year of the last 100 years, and all 71 of those record closes happened after Inauguration Day. And if we look at Trump's first full year — i.e., Jan. 20 to Jan. 20, we see that there were seven additional records. So Trump's first full year had 78 record closes, ending with 26,115.
That's a rise of 6,141 points in new territory for the Dow...in one year. And it's a 30.7-percent gain from Obama's highest close. But why should Obama be credited with those 17 Dow records set after the 2016 election? His party had just suffered a historic defeat, and not just in D.C., but also across the country on the state and local levels. A solid case might be made that Trump should get the credit for those 17 records set after the elections. In that case, Trump would have had a string of 95 record closes in 14 and one half months. (But who's counting?)
If we credited Obama only with the highest close before the 2016 elections, which was the 18,636 set on August 15, 2016, then the new territory covered under Obama's reign is not 41 percent higher than Bush's, but only 31.5 percent.
Mr. Stebbins, however, placed Trump at twelfth on the list, just behind Harding, and said the Dow had gone up by just 19.2 percent as of the running of his article. But his article ran in December, when stocks were struggling. In 2019, stocks have recovered nicely. In fact, the NASDAQ Composite had a record close on May 3 of 8,164. The Dow, however, hasn't had a record close since October 3 of last year, when it hit 26,828.
Apologists for Obama say Trump inherited his good economy. True, but Trump took the ball and ran with it; virtually all the major economic indicators are in the best shape they've been for 50 years. And the Dow forged ahead into more new uncharted territory in Trump's first year than it did in Obama's eight years. Most of the gains on the Dow under Obama were in recapturing lost ground.
The American media, almost entirely left-wing, often trade in what could be called "reductive simplism": "The tendency to oversimplify an issue or a problem by ignoring complexities or complications." Stebbins's list might be afflicted by this tendency. Many in the media want us to believe that when a Republican occupies the Oval Office and the economy is struggling, then it's the president's fault. But if a Republican president has a gangbusters economy, then he had nothing to do with it. The MSM think we're really stupid.
For a little more context, remember that Obama had a lot of accommodation from the Federal Reserve. For years, the Fed engaged in quantitative easing and had a zero interest rate policy (Q.E. and ZIRP). But the Fed hasn't extended those policies into the Age of Trump; in fact, interest rates have been rising.
Here's how Trump is cutting a swath into yet other new territory. Mr. Trump is presiding over the longest economic expansion in American history. But there lies danger, as recessions usually happen long before this point in the business cycle. So, how do we keep this very, very mature economy expanding?
None of the Democrat weenies in the debates last week can answer that question for you. On Monday, July 1, the Dow closed at 26,717. We're in spitting distance of a new record close, and maybe even a breach of the 27,000 mark.
Let the good times roll.
Jon N. Hall of ULTRACON OPINION is a programmer from Kansas City.