It’s “silly season” – so sayeth the politicians.  It’s time to throw every piece of mud at the opposition simply because a lot of people will believe it.  Fox, MSNBC, pundits who claim to know everything but in reality know nothing, and thousands of horrid political ads – it’s all a lot of noise that provides no reliable indicators on which is the best way to vote.

Can we look at some of the realities of the situation and some of the facts?

REALITIES:

• Romney:
  • We don’t know what Romney would or would not do. Unfortunately, he’s changed positions so many times, it’s hard to figure whether he’s conservative or moderate.  The “etch a sketch” metaphor has been mentioned and fair or not, it was created by his own campaign manager.
  • Yes, he did a great job with the Olympics.  He had support and money from the government that he says isn’t working.  It’s unclear how he did as governor of Massachusetts but one would think that if he did a great job, he’d easily win the state this time.  Polls show he’s 15 points down.  You want to tell me that’s meaningless?  Please explain.
  • The only thing Romney has been consistent about is that he is a social conservative.  He’s supported the idea of overturning Roe v. Wade, favors DOMA and won’t take a position on the Lily Ledbetter Act.  If that’s what you want and you’re okay with his other murkiness, you should vote for him.

• Obama:
  • Four years ago, we were headed toward a full-on depression.  We’re not now.
  • Corporate profits had risen more than with any other president.
  • The stock market has risen 14.7% a year under Obama.
  • Housing values had fallen one-third on average at the end of the Bush administration.  They’re rising again and have recovered much of the loss.

Now that we’re here, who can take us further?

FACTS:

• The U.S. economy has done better with Democratic presidents than with Republicans.
• Personal disposable income has grown nearly 6 times more under Democratic presidents.
• Gross Domestic Product (GDP) has grown 7 times more under Democratic presidents.
• Corporate profits have grown over 16% more per year under Democratic presidents (they actually declined under Republicans by an average of 4.53%/year).
• Average annual compound return on the stock market has been 18 times greater under Democratic presidents (If you invested $100k for 40 years of Republican administrations you had $126k at the end, if you invested $100k for 40 years of Democrat administrations you had $3.9M at the end).
• Republican presidents added 2.5 times more to the national debt than Democratic presidents.
• The two times the economy steered into the ditch (Great Depression and Great Recession) were during Republican, laissez faire administrations.

Don’t believe me?  Why not read the self-proclaimed “Capitalist Tool”?  The above facts can be found all over the Internet but click here to read this article from Forbes magazine.

Investment managers always point out that there’s no guarantee that past performance is an indicator of the future but given the choice between uncertainty and past negative performance versus a record and past positive performance, logic should say to select the latter.  But when did logic and facts determine a U.S. presidential election?

Tags: Americans, Assumptions, Bush, Capitalist Tool, Corporate profits, Democrats, Democrats and business, Depression, DOMA, Etch a Sketch, Forbes magazine, Fox News, futureshift, GDP growth, Governments, Great Depression, Great Recession, Housing, Journalists, Leadership, Lily Ledbetter, Massachusetts, Media, Media responsibility, Mitt Romney, MSNBC, National Debt, Olympics, Outcomes, Personal income, Politicians, Polls, President Obama, Republicans, Republicans and business, Roe v. Wade, Silly Season, Situation Analysis, Stock Market, U.S. Marketplace, Winning

It’s been popularized by the media, pundits and pols (including the U.S. Chamber of Commerce) that business in America does better when Republicans are in office.  It sounds good but rather than accept the platitudes, let’s let the data tell the story.

Since 1930, the average annual growth rate in GDP when Republicans held the White House (39 Years) is 1.82%. When Democrats have held the White House (41 Years), the average growth rate is 4.92%. During the Bush years, the average was 2.1%, Clinton 3.9%, Bush + Reagan 3%, Carter 3.3%, Nixon 2.8%, Kennedy + Johnson 4.9% and so on. While this does not reflect the party controlling Congress or the balance of the two, the data shows that Democratic party control of the White House has been better for GDP growth and consequently for business too. We often look at emotions or subjective arguments when facts tell a completely different story.

But why is just the opposite what so many believe?  There are several reasons, one being the Democrats own fault because they constantly accuse the Republican party of being the party that protects business in the U.S.  Republicans, for their part, like to say that Democrats have done nothing for jobs and that if we only reduce the tax burden placed on businesses, more jobs will be created.  The data, however, tells a different story and it’s hard to dispute facts.  There is another factor which should tell us that Democrats are better for business:  they tend to be protectionists, leaning against global, free trade.  This should translate to more jobs being kept in the U.S.  Republicans, however, can be expected to protect offshoring and outsourcing.  While I’m an ardent free trader, I still find it hard to understand why the myth exists about political parties and business.

There also is a third reason.  Republicans are much better at getting their message out there.  Democrats always seem to be the gang that can’t shoot straight.  The U.S. electorate likes simple messages and stories and Republicans are just better at telling them.

Finally, you might ask why the U.S. Chamber of Commerce hasn’t pointed out the dramatic difference in business growth under different party rule.  The Chamber should be a champion for all businesses in the U.S., not just those that benefit most from tax cuts or free trade.  While difficult for us in many ways, free trade makes a lot of sense and ultimately forces U.S. businesses to do better in order to compete.  But when we’re talking about whether the economy, hence all U.S. businesses, do better under party rule, let’s make sure we know what has actually happened in the past.

Tags: Americans, Assumptions, Democrats and business, Electorate, Free Trade, GDP growth, Media responsibility, Politics and business, Republicans and business, Trade Associations, U.S. Chamber of Commerce