GOP Drops 'Obama Bear Market' Talking Point As Dow Hits 13,000

Despite a mountain of data and the overwhelming consensus of economists to the contrary, Republican leaders including House Speaker John Boehner and would-be President Mitt Romney continue to falsely claim "Obama made the economy worse." But

dems_stock_market_bloomberg.png

Despite a mountain of data and the overwhelming consensus of economists to the contrary, Republican leaders including House Speaker John Boehner and would-be President Mitt Romney continue to falsely claim "Obama made the economy worse." But another tried and untrue GOP talking point about the supposed "Obama bear market" has largely vanished. Of course, with the Dow Jones now at 13,000 and the NASDAQ at 3,000, Republicans should be silent. After all, with the indexes at four year highs, Barack Obama is just the latest to show that the stock market almost always does better under Democratic presidents.

The conservative propaganda machine began perpetuating the "Obama bear market" myth long before the 44th President even took the oath of office. The first installment of the Republicans' "previsionist" history unsurprisingly came from CNBC host and former Reagan advisor Larry Kudlow. That right-wing water carrier, who in April 2008 compared the deepening recession to an enema (calling it "an economic cleansing" and crowing that "recessions are therapeutic"), blamed a one-day 242-point drop on the Democratic Convention:

"Are the Denver Dems downing the stock market today? The Dow is off 230 points, starting right from the get-go. So-called market analysts are blaming financials and the credit crunch as they always do. But there's more.

Obama and Biden gave us plenty of class warfare in their Springfield, Ill., get together on Saturday. Tax the rich. Redistribute income and wealth. Go after all those corporate meanies. Trade protection...

...With the Denver Dems strutting their stuff, this could be a bumpy week for stocks. Did anyone say free-market capitalism is the best path to prosperity?"

With Obama's election on November 4th, that warning shot turned into a barrage. Within 48 hours, the mullahs of right-wingistan didn't merely blame Obama for two days of market declines; they traveled back in time to lay the entire Bush recession at his feet.

Echoing CNBC's Kudlow, Dick Morris claimed the markets will "continue to tank...not just because he's a radical, not just because he's a Democrat, but because he's going to raise the capital gains tax. While Fox News' Gretchen Carlson announced, "there's a lot of feeling in the market not reacting very well to the election of Barack Obama," Fred Barnes proclaimed, "There is great uncertainty out there about [Obama's] policies." And that Thursday, the always execrable Rush Limbaugh on November 6, 2008 laid it all at Obama's feet:

"The Obama recession is in full swing, ladies and gentlemen. Stocks are dying, which is a precursor of things to come. This is an Obama recession. Might turn into a depression. He hasn't done anything yet but his ideas are killing the economy. His ideas are killing Wall Street...

...The market's down today because of the jobless numbers. That's how the Drive-Bys see it. Uhhhhh, we have the largest market plunge after an election in history. Thank you, man-child Barack Obama."

As the Dow Jones continued its slide below 7,000 in March, 2009, the conservative catcalls become a chorus. CNN's Lou Dobbs, the self-proclaimed "Mr. Independent," announced on March 9, 2009, "This is now the Obama bear market." That same day, the Wall Street Journal declared, "The dismaying message here is that President Obama's policies have become part of the economy's problem." House Minority Leader John Boehner was among the Republican leaders bemoaning "the Obama economy" and insisted that since Obama's inauguration six weeks earlier, "Certainly the stock market hasn't acted very well." Later that month, the Journal's Daniel Henninger blasted Obama's "radical presidency":

"A Democratic Party that was always anti-Wall Street is becoming anti- Main Street."

The drumbeat hardly ended there. On March 8, 2009, Fox News host Chris Wallace asked an uncomfortable John McCain, "Can this now fairly be called the Obama bear market?" That propaganda only echoed the Republican talking points regurgitated two days earlier by Bloomberg in an article titled, "'Obama Bear Market' Punishes Investors as Dow Slumps" and the Wall Street Journal rant, "Obama's Radicalism is Killing the Dow." On March 6th, Sean Hannity was nearly orgasmic as he trumpeted the declines on Wall Street:

And our headline this Friday night: Welcome to Day Number 46 of "Obama's Bear Market." Now, that's what some news organizations are calling it tonight as the Dow Jones industrial average actually finished up about 30 points today at the end of a disastrous week.

According to Bloomberg News, the Dow has now dropped faster during the first six weeks of the Obama administration than any other administration in at least 90 years. But is that a surprise after weeks of talking down the economy?

Despite a mountain of data and the overwhelming consensus of economists to the contrary, Republican leaders including House Speaker John Boehner and would-be President Mitt Romney continue to falsely claim "Obama made the economy worse." But another tried and untrue GOP talking point about the supposed "Obama bear market" has largely vanished. Of course, with the Dow Jones now at 13,000 and the NASDAQ at 3,000, Republicans should be silent. After all, with the indexes at four-year highs, Barack Obama is just the latest to show that the stock market almost always does better under Democratic presidents.

The conservative propaganda machine began perpetuating the "Obama bear market" myth long before the 44th President even took the oath of office. The first installment of the Republicans' "previsionist" history unsurprisingly came from CNBC host and former Reagan advisor Larry Kudlow. That right-wing water carrier, who in April 2008 compared the deepening recession to an enema (calling it "an economic cleansing" and crowing that "recessions are therapeutic"), blamed a one-day 242-point drop on the Democratic Convention:

"Are the Denver Dems downing the stock market today? The Dow is off 230 points, starting right from the get-go. So-called market analysts are blaming financials and the credit crunch as they always do. But there's more.

Obama and Biden gave us plenty of class warfare in their Springfield, Ill., get together on Saturday. Tax the rich. Redistribute income and wealth. Go after all those corporate meanies. Trade protection...

...With the Denver Dems strutting their stuff, this could be a bumpy week for stocks. Did anyone say free-market capitalism is the best path to prosperity?"

With Obama's election on November 4th, that warning shot turned into a barrage. Within 48 hours, the mullahs of right-wingistan didn't merely blame Obama for two days of market declines; they traveled back in time to lay the entire Bush recession at his feet.

Echoing CNBC's Kudlow, Dick Morris claimed the markets will "continue to tank ... not just because he's a radical, not just because he's a Democrat, but because he's going to raise the capital gains tax. While Fox News' Gretchen Carlson announced, "there's a lot of feeling in the market not reacting very well to the election of Barack Obama," Fred Barnes proclaimed, "There is great uncertainty out there about [Obama's] policies." And that Thursday, the always execrable Rush Limbaugh on November 6, 2008 laid it all at Obama's feet:

"The Obama recession is in full swing, ladies and gentlemen. Stocks are dying, which is a precursor of things to come. This is an Obama recession. Might turn into a depression. He hasn't done anything yet but his ideas are killing the economy. His ideas are killing Wall Street...

...The market's down today because of the jobless numbers. That's how the Drive-Bys see it. Uhhhhh, we have the largest market plunge after an election in history. Thank you, man-child Barack Obama."

As the Dow Jones continued its slide below 7,000 in March, 2009, the conservative catcalls become a chorus. CNN's Lou Dobbs, the self-proclaimed "Mr. Independent," announced on March 9, 2009, "This is now the Obama bear market." That same day, the Wall Street Journal declared, "The dismaying message here is that President Obama's policies have become part of the economy's problem." House Minority Leader John Boehner was among the Republican leaders bemoaning "the Obama economy" and insisted that since Obama's inauguration six weeks earlier, "Certainly the stock market hasn't acted very well." Later that month, the Journal's Daniel Henninger blasted Obama's "radical presidency":

"A Democratic Party that was always anti-Wall Street is becoming anti- Main Street."

The drumbeat hardly ended there. On March 8, 2009, Fox News host Chris Wallace asked an uncomfortable John McCain, "Can this now fairly be called the Obama bear market?" That propaganda only echoed the Republican talking points regurgitated two days earlier by Bloomberg in an article titled, "'Obama Bear Market' Punishes Investors as Dow Slumps" and the Wall Street Journal rant, "Obama's Radicalism is Killing the Dow." On March 6th, Sean Hannity was nearly orgasmic as he trumpeted the declines on Wall Street:

And our headline this Friday night: Welcome to Day Number 46 of "Obama's Bear Market." Now, that's what some news organizations are calling it tonight as the Dow Jones industrial average actually finished up about 30 points today at the end of a disastrous week.

According to Bloomberg News, the Dow has now dropped faster during the first six weeks of the Obama administration than any other administration in at least 90 years. But is that a surprise after weeks of talking down the economy?

But then a funny thing happened on the way to the Obama poor house: The stock market started its steady, upward swing. But for the conservative commentariat, of course, credit for that progress did not go to President Obama.

On April 18, 2009, Fox News displayed an on-screen caption proclaiming, "Stocks Rally as 'Tea Party' Rallies Take Nation by Storm. Host Brenda Buttner described the surge on Wall Street as "a Tea Party rally." As Media Matters recounted:

Buttner later asked Bulls & Bears commentator Gary B. Smith: "[P]art of the tea party was having voices heard. For so long, all we were hearing about was nationalizing banks and socialism and all that. Just having this out there, does that help Wall Street? Does that help the bulls?" Smith responded: "Absolutely, Brenda. You know, first of all, you heard for so many weeks and months that, you know, the whole country, you know, Obama won overwhelmingly, and it looked like, you know, we were going to go lockstep down this, you know, this socialist path." He continued: "And then we started having these tea parties," which, according to Smith, "shows that ... the normal, average American is just kind of sick of all the, you know, the tax-and-spend culture." He concluded: "So, I think it's all a good thing, and I think that it's helped the rally."

But it was Neil Cavuto of the Fox Business Channel who takes the cake for trying to claim that, well, black is white. As the Dow soared past 10,000 last October, Cavuto asked:

What was once the Bush recession is now the Bush recovery?

And so it goes. On his March 18, 2010 show, Larry Kudlow asked CNBC's Jim Cramer about his belief that "Obamacare will topple the stock market." Since then, the Dow has jumped another 2.1 percent. But with George W. Bush in the White House in April 2007, Kudlow expressed a different view of what the Wall Street's performance said about presidential leadership on the economy. This morning, Paul Krugman helpfully recalled Kudlow's words:

"I have long believed that stock markets are the best barometer of the health, wealth and security of a nation. And today's stock market message is an unmistakable vote of confidence for the president."

According to Lawrence Kudlow, then, the stock market is expressing an awful lot of confidence in Democratic President Barack Obama. Then again, there's no shortage of studies to show that stock market returns are higher under Democratic leadership in the White House. As Slate in 2002 and The New York Times in 2003 found, "It's not even close. The stock market does far better under Democrats."

As the New York Times also showed in October 2008, the Democratic Party "has been better for American pocketbooks and capitalism as a whole." To make its case, the New York Times asked readers to imagine having put their money where its mouth is. Contrary to Republican mythology, Americans fare better — much, much better — under Democratic administrations:

As of Friday, a $10,000 investment in the S.& P. stock market index would have grown to $11,733 if invested under Republican presidents only, although that would be $51,211 if we exclude Herbert Hoover's presidency during the Great Depression. Invested under Democratic presidents only, $10,000 would have grown to $300,671 at a compound rate of 8.9 percent over nearly 40 years.

(For the eye-popping chart of the S&P's performance under each of the presidents from Hoover through Bush 43, visit here.)

Just last month, Bloomberg News released a similar analysis. The findings were the same. $1,000 invested in the S&P 500 during the Kennedy administration would, over the course of ensuing Democratic presidencies, have yielded a return of $10,920. On the other hand, "a $1,000 stake invested in a fund that followed the S&P 500 under Republican presidents, starting with Richard Nixon, would have grown to $2,087 on the day George W. Bush left office." As Bloomberg concluded:

While Republicans promote themselves as the friendliest party for Wall Street, stock investors do better when Democrats occupy the White House. From a dollars- and-cents standpoint, it's not even close.

Of course, that historical trend which has continued during the Obama presidency hasn't stopped some Republican die-hards from pretending otherwise. In February, Arizona Congressman Trent Franks claimed that the Dow hit 13,000 in spite of President Obama, who "seems to be doing everything he can to hold it back." And on Monday, Tea Party favorite Allen West (R-FL) told Neil Cavuto of Fox News that the prospect of a Republican victory in November is driving the rise on Wall Street:

WEST: Well, I would think maybe the markets are maybe looking five to six months down the road, when we have a change in leadership in this country -

CAVUTO: Wait a minute, you think that this is built on a Republican either capturing the White House or Republicans capturing the Senate? ... That might or might not be a stretch, but it is out there as a factor. You think that's a genuine factor? You think that the markets are getting bubbly in anticipation of a Republican taking the White House?

WEST: Oh, absolutely.

As it turns out, absolutely not. Or, as Businessweek summed up the stock market's rise in putting the final nail in the coffin of the Obama bear market myth (see chart at top):

"Dow 13,000? Thank Democrats."

(This piece also appears at Perrspectives.)

About Jon Perr

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