Market hits “record high”, finally getting back to where Clinton got it six years ago.

October 5, 2006 by mugsy.

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Well, it took only six years for the DJIA (”Dow Jones Industrial Average”) to finally surpass its January 14, 2000 peak of 11,723 under the Clinton Administration to close at 11,850 on October 4, 2006, before Presidential hopeful Texas Governor George W. Bush started to talk the economy into a recession. He knew he couldn’t beat VP Gore on the economy unless he convinced voters that the longest peacetime economic expansion in history wasn’t really as good as people were making it out to be, with the suggestion that if we just put them in charge (”them” being the GOP), the economic boom would have been much better.

And now, six years later, the economy has struggled to overcome the disasterous policies (both “economic” and “foreign”) of the Bush Administration just to make it back to where we were before they took control.

Let’s compare records then:

When President Clinton took office in January of 1993, the DOW was just under 3,500… a level that took 97 years to reach, finally reaching 3,500 that May. Three months later: 3,600, and three months after that: 3,700. Two months more to reach 3,800, and barely three WEEKS after that to hit 3,900. However, it took another year to hit 4,000 (February 1995). Why?

Why, after a series of quick record highs, did the market suddenly stagnate for a full year? Because it was an election year, silly! That was the year of Newt Gingrich’s “Republican Revolution” that seized control of both Houses of Congress. Republican candidates went around the country bashing President Clinton and his policies, preparing the American Public for the major governmental shake-up to come.

So, back to 1995.

Once again, the DOW records came in rapid succession. 4,100 one month later in March. 4,200 in April. Less than three weeks to 4,300. Less than TWO weeks to hit 4,400.

Another month to 4,500. Three weeks to 4,600; TWO DAYS to hit 4,700 in July 1995. In 1996, even a Bob “Mr. Excitement” Dole candidacy and the Monica Lewinski Scandal couldn’t slow the market from hitting 13 more record closes in the next 12 months.

Jumping ahead, after fours years in office, the Clinton Economy had DOUBLED the DJIA from 3,500 in 1993 to 7,000 in 1997.

I think you get the point by now. In the five years to follow, the market continued its meteoric climb to a record close of 11,723 in January of 2000… another big election year. Republican candidates all veying for the RNC nomination all downplayed the incredible Clinton economy in order to level the playing field. Every speech became self-fulfilling prophecy, with GOP candidates deriding the economy (”It’s not as good as they’re saying!”, candidate Bush was fond of saying). The closer we came to it looking like George Bush might actually win, the further the market sank.

George W. Bush becomes President of the United States and he is tasked with reversing the DJIA slide that he himself started. By September 7, 2001, the market had lost 19% of its peak value 20 months before to close at 9,606.

Then came 9/11.

An already weak market plunged nearly 700 points when it reopened the following Monday, and continued to sink like a stone for the next 13 months (to 7,286… a loss of nearly 4,500 points from its 2000 record high) while the Bush Administration made the case for war with Iraq.

Defense spending and cutting interest rates to the bone (spuring on a Real Estate and Home Re-financing mini-boom) helped the market get back in 2003 to where it was before 9/11.

Between 2003 and the latest record close earlier this week, the market bounced around like an EKG for two and a half years until finally getting back to where it was before the GOP seized all three branches of government (arguably the Supreme Court is included after the 2000 election debacle).

If one were to graph the Clinton economy, it might look very much like a curve heading up into the stratosphere (”1/infinity”) with the only leveling-off periods in election years of heavy GOP rhetoric.

On the other side, a graph of GWB’s economic record might look more like a dinner plate with a dent in the middle. “Pat yourself on the back guys!” you finally broke even!… unless you adjust for inflation… but that’s another story.

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