Smart. Sharp. Funny. Fearless.
Friday, December 9, 2016

By Michael Hiltzik, Los Angeles Times

It was widely noticed two weeks ago that the Standard & Poor’s 500 index, the most important stock market indicator, had hit a milestone by crossing 2,000 for the first time.

It was less widely noticed that on that day, you would have notched a 148 percent gain if you had bought stocks on the day of President Barack Obama’s inauguration. In other words, the 2,000-point S&P was another manifestation of the Obama bull market — but nobody seems to call it that.

Big business continues to grouse about the White House, as it has done pretty much nonstop since Jan. 20, 2009. The very day after the S&P record close (the index closed Tuesday at 1,988.44) came yet another attack on Obama’s policies by the U.S. Chamber of Commerce — this one a largely evidence-free assertion that the Affordable Care Act “has incentivized employers to hire part-time workers over full-time ones.” Neither the Bureau of Labor Statistics nor the Congressional Budget Office has found signs of this effect, which is a favorite right-wing shibboleth.

The hostility of business and industry to Obama has become a byword over the years, from plutocrats complaining about being disrespected to bankers complaining that they’re woefully misunderstood. Yet judging by the stock market’s performance, no president has been as good for the capital markets since Bill Clinton (who also was detested by the business community). By some measures Obama also handily outranks that beacon of Republican business-friendliness, Ronald Reagan.

Here are some rough figures to ponder: After their full eight years in office, Clinton had presided over a run-up in the S&P 500 of about 210 percent; Reagan 118 percent. Obama hasn’t served his full term yet, of course, but as of Tuesday’s close the S&P is showing a gain of about 147 percent. If the market remains flat from here or gains, Obama will also have outrun Dwight Eisenhower, who notched a 129 percent gain during his term.

Obama beats Reagan and trails only Clinton among postwar presidents in many partial-term measures too. At Day 2,000 of his term, as was calculated by Russ Britt of MarketWatch in July, the stock market had gained 142 percent; for Reagan it was up about 88 percent and for Clinton 176 percent at the same stage.

The booby prize belongs to George W. Bush, down about 39 percent during his term.

In many ways, of course, this is a misleading exercise. Presidents have much less influence over the economy, not to mention the stock market, than they’re typically given credit for. But since they’re invariably blamed by the opposition party for market slumps that occur on their watch, it’s only proper to ask why this president, in particular, isn’t getting credit for a substantial bull run.

Occasionally a commentator will begrudgingly award Obama props for the economy’s performance, even in conservative publications, but on the whole he seems to get poor marks for economic stewardship.

Consider a curious recent piece by Daniel Gross in the Daily Beast: Gross says most of the credit for the stock market should go to the Federal Reserve and to U.S. corporations’ ability to tap foreign markets — but he also acknowledges that Obama was able to “reverse the free fall of late 2008 and early 2009, stop the panic, and create the conditions for growth.” Those are pretty significant policy achievements for which the Obama administration receives almost no credit. As for the Fed, let’s not forget that Obama did appoint Janet Yellen as chairwoman, in part because of the understanding that she would continue the policies of her predecessor, Ben Bernanke.

One frequently overlooked point is that, although presidents can’t always do much to push the economy or stock market higher, their mistakes can do much more to push both lower. George W. Bush is the gilt-edged example: His tax cuts, debt-fueled spending on military adventures and indifference to regulation all helped drive the U.S. economy off the cliff in 2008. He deserves every scrap of blame that can be mustered for the 40 percent decline in the S&P 500 during his term, and for the years of hangover since.

None of this means that the U.S. economy is doing as well as it should, or that businesses don’t have some reason for unhappiness with the Obama White House. Obama’s housing policies have been ineffective. Job growth has been steady but too slow — thank a recalcitrant Congress for that. Business doesn’t like regulation, which it has been getting plenty of, at long last.

More to the point, the stock market run-up in some ways underscores the structural problems of the U.S. economy, which really demand more attention from policymakers in the White House. Those gains have been concentrated among the upper echelons of the income pyramid, very much at the expense of the working class. (Don’t tell me that “workers are shareholders too” — the effect on their wealth and income from pension fund holdings is minuscule compared with the ground they lost through wage stagnation.)

One of the most persistent phenomenons in American history is that big business never recognizes when it’s getting a break. In 1934, when Franklin Roosevelt watered down the Securities Act that created the Securities and Exchange Commission, progressives were outraged.

Wall Street should remember FDR “with gratitude,” wrote an infuriated progressive in the New Republic. But he knew that wouldn’t happen — the stock exchange, he predicted, “will turn upon Roosevelt with fury.” So it did, even though FDR did more than any other individual to save Wall Street from extinction.

The pattern still holds today.

Michael Hiltzik is a columnist for the Los Angeles Times. Readers may send him email at [email protected]

Photo: Sebastian Alvarez via Flickr

Want more economic news and analysis? Sign up for our daily email newsletter!