Americans have long viewed the Dow Jones as an index of measure when it came to the general economy. While it is by no means a perfect measure of the economy, it sits in its own highlighted box on all of the major news channels for a reason. Because Americans assess our economic strength by this average, it may be telling to see how it performs in certain situations.
Earlier this week in The Hill, Dick Morris said of President Obama:
President Obama, in his pursuit of liberal big-government spending, has totally neglected the role of the president of the United States in reversing global panic. To the contrary, his every remark and the constant preoccupation of his Cabinet is to heighten the sense of crisis and to escalate the predictions of doom if we do not do as they tell us and raise spending now and taxes later. Instead of being a firewall, reassuring Main Street even as Wall Street crashed, he has become a conduit of panic, spreading the mood of desperation from the stock exchange floor to kitchen tables across the world.
This was interesting, because enough time has elapsed since President Obama was elected, sworn in and with a couple signature measures under his belt to see the effect his policies are having on the economy. And what better way than to see how the Dow Jones Industrial Average has reacted to some of his biggest days since taking office.
- November 5, 2008: Dow drops 530 points the day after President Obama is elected.
- January 20, 2009: Dow drops 359 points the day the President delivers his inaugural address.
- January 28, 2009: The House passes their stimulus proposal after trading hours. The next day, the Dow drops 224 points.
- February 9, 2009: President Obama has his first prime-time press conference, followed by Treasury Secretary Geithner’s speech on the credit markets the next day. The Dow drops 381 points on February 10.
- February 13, 2009: The House passes the conference version of the stimulus bill in the afternoon, and the Dow closes 83 points down. After the Senate passes the final version late in the evening, the Dow drops 343 points the next day.
- February 17, 2009: The President signs the stimulus bill into law in Denver, CO. The Dow drops 293 points.
- February 25, 2009: The Dow drops 226 points the day after President Obama delivers his address to a Joint Session of Congress.
Now, this type of data runs the risk of cherry-picking. So, in 2008, the Dow under President Bush averaged a loss of roughly 86 points per week. Since taking office, the Dow under President Obama dropped 1,217 points and has averaged a loss of approximately 202 points per week, or roughly 43 points per trading day. This is a rate approximately 2.5 times greater than under President Bush last year.
So, it would lead some to believe that Wall Street, investors and American consumers are not responding to President Obama’s tax and spend philosophy.
So, having inherited a recession, his words are creating a depression. He entered office amid a disaster and he is transforming it into a catastrophe, all to pass every last bit of government spending and move us a bit further to the left before his political capital dwindles.
It appears the right solution for America may be less speeches by the Obama Administration, and more reassurances that the future isn’t all taxes, spending and deficits. That type of language would be a great step to recovery.