Are Democratic presidents better for your stock portfolio than Republicans?

At this time last year, things looked pretty dire for the Democrats. The economy was in a full-blown Jimmy Carter cardigan-sweater malaise, and Republicans were still feeling their oats following a midterm election in which they took more seats than Rush Limbaugh on a Green Bay-to-Rockford commuter flight. (Low blow, I admit, but at least I didn’t call him a prostitute.*)

Oh, what a difference a year makes. The economy appears at long last (fingers crossed, let’s not jinx it) to be gaining traction; the Dow recently topped 13,000 for the first time in four years; Mitt Romney, Rick Santorum, and Newt Gingrich are still insisting they’re running for president; and Republicans have convinced themselves that fighting access to birth control will make them populist darlings.

Things could be better, of course. Job growth could be more robust, gas prices could be lower, and the GOP could be devolving ineluctably into a Stone Age council of shamanic elders even faster. Indeed, I won’t be satisfied until the Dow hits 20,000, House Republicans vote to censure Copernicus, and Rick Santorum accidentally blurts out something about the female brain being a third the size of the male brain.

Of course, unless you’re Al Gore, being in power during flush economic times is a sure ticket to electoral success, so if things continue on the upswing (a big if, given the economic starts and stops we’ve seen over the last few years), Republicans could start to get more and more desperate – adding the public good of free entertainment to an already tasty stew.

Now, I’m on record as saying that a president’s economic performance is largely based on luck. I think it’s only fair to remain agnostic on this question, because so much of what happens in the economy is beyond the reach of the chief executive. I think there are a lot of things a president can do to hurt the economy – like starting a war for no reason or failing to adequately regulate the banking industry – but I’d still argue that taking office just as the business cycle is starting to drive the economy in the right direction is the best economic plan any president can have.

That said, blaming the sitting president for the performance of the economy is the best possible strategy any opposition party has for electoral success. Better even than drumming up a controversy involving birth control (which is a really, really shrewd one, ‘cause you know how much voters in the swing states hate birth control).

So if presidential candidates continue to insist on basing their suitability for office on their likely economic performance, it’s only fair to look at what that performance is likely to actually be.

And since this country has been around for some years now, we have some data on that.

I’ve written about this before. In a September 2008 article for, Michael Kinsley looked at the national economic numbers since 1959 and concluded that Democratic presidents were clearly better stewards of the economy than Republican presidents.

Granted, that’s four years ago, and the economy stumbled big-time at the beginning of Obama’s term (following the outright cratering that marked the Bush II years), but at the very least it calls into question the conventional wisdom – brayed noon and night from sea to shining sea – that Republican presidents are always better for the economy.

Which brings me to that suddenly hale and hardy Dow. One of the most curious things about the Clinton years was that the people who hated the president the most were the biggest beneficiaries of his economic stewardship. The value of their portfolios seemed almost to rise in lockstep with their revulsion. Without a doubt, Clinton was a sleazeball, but I’d argue that among the Washington aristocracy, his deviance was actually in the fat mid range of the sexual bell curve. I have no way of knowing for sure, but I’d wager that some of his harshest critics were just a white fluffy dog and a basket of lotion away from being Buffalo Bill.

In fact, stocks shot to the moon under Clinton before falling under George W. Bush. And if you look at the performance of the stock market in the last 50 years, it’s consistently done better under Democratic presidents than Republican presidents. And the difference is not negligible. According to a recent analysis by Bob Drummond on Bloomberg Government, had you invested $1,000 in a hypothetical S&P tracking fund when the Kennedy administration began and measured it only during Democratic administrations, it would now be worth $10,920. At the end of George W. Bush’s presidency, a similar fund measured only during Republican administrations would have been worth $2,087.

Again, this could mostly be luck. The stock market climbed pretty steadily under Reagan and Bush I. But when they give speeches, Republicans hardly ever attribute the performance of the economy to luck. They throw out terms like “class warfare” and “socialist” to demean everything the scoundrels across the aisle might ever propose. (By the way, a socialist is someone who believes that private individuals should not own the means of production, so people who use the word in reference to Democrats are either ignorant or dishonest; take your pick.)

Then again, luck or not, if you were a betting man, and the roulette wheel had come up black at a 10:2 ratio over the last – oh, let’s just say, 50 years – the next time you put down your money, you’d probably wager it on black.

It’s also possible, of course, that it’s not luck, and that redistributing income so that more of it falls into the hands of the poor and middle class – who are likely to spend it right away – is a winning economic strategy.

We’ll probably never know for sure. But I’ll be magnanimous and chalk up the Democrats’ historical economic successes to luck. Which means, at best, Republicans have fought Democrats to a draw over the last 50 years. So how to decide whom to vote for? I don’t know. Say, why not find out which party is still picking fights over birth control?

Just a thought.

*Note: I think the most startling thing about Rush’s latest silverback-gorilla rant is that he’s still using the term “feminazi.” It just strikes me as desperate, like he sees his audience slipping away and so reflexively dredges up the old classics. When I heard that, I immediately looked down to make sure I wasn’t holding a Crystal Pepsi and wearing Zubaz.

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