One month ago, the Wall Street Journal editorial board complained that President Barack Obama had ruined the economy. As evidence, they cited the decline in the Dow Jones Industrial Average, which closed at 6763 on March 2.
"The dismaying message here is that President Obama's policies have become part of the economy's problem," the Journal concluded, as it blamed Obama for the Dow's overall decline of 25 percent in two months. The Journal also attacked Obama's proposed budget. "The market has notably plunged since Mr. Obama introduced his budget last week, and that should be no surprise," the editors wrote.
Never mind the nearly $11 trillion federal debt the president inherited, or the $1.3 trillion deficit, the 8.1 percent unemployment rate, falling home prices and astounding corporate losses. In fact, never mind the recession that started in December 2007. The Journal saw a short-term drop in the stock market and interpreted it as a guilty verdict against a new president who had been in office for just 6 weeks.
But today the news was different. After the Financial Accounting Standards Board revised the rules on "mark to market" accounting this morning, the Dow climbed over 8000, slightly higher than its close at 7949 on Inauguration Day. And this market rally comes on a day with bad economic news on employment.
Will The Journal Apologize?
So what will the Journal say now that the stock market has "rebounded"? Does this mean the market now loves Obama's policies? Will the conservative editorial board credit Obama for the rebound as it blamed him for the decline? And more importantly, will the Journal now apologize to the president?
An apology may be too much to expect, but if nothing else, the Journal should at least acknowledge that presidents should not be judged by short-term swings in the stock market.
First, the president serves a constituency broader than Wall Street. His job is not to cater to wealthy investors but rather to represent the best interests of all Americans, regardless of their portfolio, or absence thereof.
Second, presidents are not entirely responsible for the rise and fall of the market. The editors of the Wall Street Journal should know this. Markets respond to a whole host of factors other than government policy.
But if the Journal wants to continue blaming Obama for the stock market, then let's at least be consistent about this philosophy and apply it to other presidents.
Stock Market Does Well Under Democrats
For all the talk about Obama's negative impact on the stock market, let's not forget the Dow fell 5000 points (from 13,043 in Jan 2008 to 7949 in January 2009) in President Bush's last year in office. That's a 40 percent drop in 1 year under a Republican president.
And for those who blame last year's decline on the election of Obama, not true. Most of the drop in the Dow took place well before Obama was elected. The Dow plunged 38 percent last year (from 13,043 in January 2008 to 8175 in October 2008) before election day.
In fact, the Republicans don't want you to know this, but the Dow usually does quite well under Democrats. The only Democratic president in modern history to preside over a declining Dow was Jimmy Carter, and even then the Dow only fell 8 points (yes, you read that correctly, 8 points!) in 4 years, less than 1 percent of its value.
The Dow rose under Democratic presidents Roosevelt, Truman, Kennedy, Johnson and Clinton, but fell under Republican presidents Nixon and George W. Bush.
The worst performance in the Dow's history was October 19, 1987, when the index dropped more than 22 percent in one day. And it happened under Ronald Reagan's watch. To find any comparable loss, you have to go back to another Republican president - Herbert Hoover in 1929. In fact, 4 of the Dow's 5 worst years (1931, 1907, 2008, 1930 and 1920) happened under Republican presidents and all 5 of the Dow's worst days occurred under Republican presidents.
In contrast, the Dow's best day ever was March 15, 1933, just weeks after Franklin Roosevelt was sworn into office. That year, Roosevelt also presided over the Dow's best annual performance in history.
This doesn't mean the Democrats are always better for the stock market, or that the Republicans are always worse. Nor should the stock market be used as the sole indicator of a president's performance. That seems obvious, but try telling that to the editors of the Journal.
Follow Keith Boykin on Twitter: www.twitter.com/keithboykin