Is Obama Responsible for the Stock Market Rally?

Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

“Wall Street may not cheer, but Obama’s been good for stocks.” — Jeff Sommer, New York Times (October 21, 2012)

Back in 1989, when I started my investment newsletter, Forecasts & Strategies, candidate Ronald Reagan used to ask, “Are you better off than you were four years ago?”

For investors who stayed fully invested during the treacherous 2009-2012 period, the answer is overwhelmingly “yes!” The stock market has doubled in those four years.

But who’s responsible? Typically, presidents take credit for any good trend during their presidency, even if they had little to do with it. For example, President George H. W. Bush (the senior President Bush) took credit for the collapse of the Berlin Wall in 1989 and the fall of the Soviet Union in 1991, even though most historians agree that it was former President Ronald Reagan’s policies that pushed the Soviet model to the brink.

In the case of the stock market, the four-year rally has more to do with the Federal Reserve than the White House. The numerous “quantitative-easing” measures and ZIRP (zero interest rate policy) did more than anything to improve the balance sheets of most banks and finance companies. Major corporations cut costs and increased dramatically their bottom line — causing investors to buy their stocks.

If anything, I would argue that the stock market rallied despite the actions of Obama and the Congress to impose new taxes (Obamacare) and regulations (Dodd Frank) on publicly traded companies.

Last month, Ron Baron held his annual Baron Investment Conference at Lincoln Center in New York City. During his talk on Oct. 12, he mentioned President Obama and got nice applause. Then he mentioned Gov. Romney’s name and got a roar. Over 80% of the audience of Baron clients were overwhelmingly in favor of Romney. Why? Romney will keep the hard-fought-for tax cuts for investors, as well as the 15% rate on long-term capital gains and dividends.

Smart investors know that a Romney victory favors investors for the long run, even though traditionally the first year of a four-year presidential cycle is a bad one for investors.

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Yours for peace, prosperity and liberty, AEIOU,

Mark Skousen
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“You Blew It!”
Hannity Hates Broadway?

 “I’ve only been to one Broadway play and I hated it.” — Sean Hannity

I don’t listen much to Sean Hannity, the Fox News host and radio personality. Most of the time, I listen to audio books when I am driving my car. But I happened to be listening briefly to Mr. Hannity last week when he blurted out, “I’ve only been to one Broadway play and I hated it.”

I wonder about a man who is so narrow-minded in life that all he thinks about 24/7 is politics. What ever happened to the well-rounded, educated person? What ever happened to a liberal arts education? I only can surmise that, as a young man, Mr. Hannity was never exposed to the delights of musicals, plays, classical concerts, opera and other higher pleasures in life? I wonder if his wife has the same attitude? I hope not.

My wife Jo Ann loves Broadway, and she goes to the theater in New York probably once a week to see a new play or a musical. It is one of the reasons we live in this very expensive town. I accompany her whenever I can (most of the time), they are so often uplifting and a delightful break from the daily routine. I can’t imagine anyone living in the greatest city in the world and not taking advantage of Broadway or Lincoln Center.

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Last week, I celebrated my 65th birthday. After I appeared on PBS’s “Nightly Business Report” (at the Nasdaq offices in Times Square), we went to dinner at Michael Jordan’s and then took in a wonderful New York City ballet.

No doubt Mr. Hannity has hobbies and avocations outside of politics. I hear he likes sports. I like sports, too. I consider myself a well-rounded person. But as Arthur C. Clarke once remarked, “Politics and economics are concerned with power and wealth, neither of which should be the primary, still less the exclusive, concern of full-grown men.”

At FreedomFest (, my annual Renaissance gathering in July in Las Vegas, we don’t just talk about politics and money; we also have sessions on philosophy, history, science & technology, healthy living, law and religion, music and dance. I’m always pleased by the large number of attendees who are interested in our non-political and non-financial topics each year. Next time you see Mr. Hannity — invite him. He might learn a thing or two about life.

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Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

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