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Message: Markets and Election Outcome (Part 1)

Re: Markets and Election Outcome (Part 2)

posted on Oct 28, 2008 07:54PM

I don't know if congress has been as much of a factor as one might think. The president has a stronger influence on economic policy for his term in power than congress for several reasons, not the least of which is that they submit the budget and ultimately steer the countries economic direction as a result.

Without a doubt almost all 2 term presidents defined economic policy during their stay in office regardless of whether they had congressional support. Reagan who had to deal with a democratic house his entire time in office is a perfect example.

A more likely reason for the markets doing better under Democrats is that Democrats tend to be more inflationary while Republicans less so. Inflation makes the markets rise as we all know. Some confuse inflation with growth.

With the exception of George W., Republicans have tended to be more conservative in spending and fiscal policy.

A more conservative approach, by it's very nature, mitigates inflation and thus markets.

This is not to suggest that one is a better approach than the other or that one party is better for the economy than the other. I only put this forth as observations.

Here is a list of some of the presidents and their support in congress. (Yrs house or senate with refers to same party as pres in senate or house)

Pres House With Senate With

Bush 6 4

Clinton 2 2

Reagan 0 6

Nixon 0 0

Kdy/Johnson 8





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