NPR Story
1:30 pm
Wed October 30, 2013

Obama-Era Stock Market Gains Surpass Reagan Era

Originally published on Wed October 30, 2013 2:29 pm

President Obama has passed Ronald Reagan and is gaining on Bill Clinton, when it comes to how far the stock market has climbed during his time in office.

Under Obama, the S & P 500 has has jumped 120 percent. That beats Reagan’s 118 percent and is closing in on Bill Clinton’s 210 percent.

Is it fair to compare these presidents? And how much down the president have to do with the stock market, anyway?

Here & Now’s Jeremy Hobson asks Roben Farzad of Bloomberg Businessweek.

Guest

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Transcript

JEREMY HOBSON, HOST:

From NPR and WBUR Boston, I'm Jeremy Hobson. It's HERE AND NOW.

It seems like just about every day the stock market hits a new record high. And now it turns out all those record-breaking closes have sent President Obama soaring past President Reagan when it comes to how far the stock market has climbed during their times in office. Under President Obama, the S&P 500 has risen 120 percent. That beats Reagan's 118 percent but is still shy of Bill Clinton's 210 percent.

Roben Farzad, a Bloomberg Businessweek contributor, has been crunching the numbers, and he joins us now from Richmond, Virginia. Roben, good to have you.

ROBEN FARZAD: Thank you, Jeremy.

HOBSON: Well, and let's be clear. First of all, President Obama's term is not over yet. We never know what's going to happen when we look at the full eight years. But what about this? The president took office when the stock market was collapsing. So he did kind of get a head start.

FARZAD: Yeah. It was great because the Bush people had completely - I mean, they'd abdicated. And we remember the financial crisis when the SEC completely did not know what was going on. And typically, the last year of a presidential term has been cataclysmic for the market. You remember Bill Clinton in 2000, obviously, Bush in 2008. Obama had the advantage of getting sworn in just as the market was setting what appears in hindsight to be a generational low. So a lot of it was just very lucky timing.

HOBSON: And - well - and how much has it come back? You say 118 percent since that bottom, which was in, what, March of 2009.

FARZAD: Oh, no, no. March 2009, the market - the S&P 500 bottomed to levels it had not seen since 1997, and if you include inflation, levels not seen during the LBJ presidency. It was a true washout. Since that point, the S&P 500 has returned a total of 189 percent when you include dividends and everything else. And the funny thing is it's not like the White House is taking a victory lap around this because clearly it happened under very bifurcated circumstances.

Wall Street gets it groove back. Main Street is still struggling. Credit is very unevenly available. And so it's vexingly difficult. It's not like you can throw a press conference and talk about capital gains and the investor class. Obama has been deafeningly mum about this.

HOBSON: Well - and how much does the president have to do with the performance of the stock market anyway? You snuck in a little blame there on the Bush administration for the financial collapse. But can you really blame or give praise to the president for what happens in the stock market?

FARZAD: Well, you can to a certain extent. Obviously fiscal policy, and he had the honeymoon, the first 100 days, to push through something. You remember Rahm Emanuel saying you never should waste a chance to use a crisis. But he's been thwarted largely. Washington has been divided. We saw it happen with the debt ceiling showdown. We saw it happen with the U.S.'s credit rating getting downgraded in 2011.

And even in spite of all that, in spite of indebtedness and an inability to get anything done in D.C. - maybe because of it - stock market has been going gangbusters. But you mentioned something that's critically important. It's the Federal Reserve that has largely taken the role of primary economic operator in this country. Never have we seen the kind of intervention that we've seen over the past five years since the market melted down.

HOBSON: Well - and we should note that a lot of people may judge President Obama's economic performance not on the stock market but on the job market, which has not had a recovery anything like what we've seen in the stock market.

That's true. The job market still needs to recover two million jobs at last count just to revisit its pre-financial crisis levels. Meanwhile, the stock market is at an all-time high. And the two don't necessarily correlate that closely. I mean, the economy was still losing hundreds of thousands of jobs a month when the market had bottomed and rallied, I think, upward of 50 percent in 2009. So go figure.

Roben Farzad, Bloomberg Businessweek contributor, thank you so much for joining us.

FARZAD: My pleasure. Take care.

HOBSON: This is HERE AND NOW. Transcript provided by NPR, Copyright NPR.

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