Re: "Personally, I am not very willing to admit a totally direct correlation in economic data and control of the branches of government."
(You mean a '100% correlation'? No, of course not... I wouldn't believe anything like that either!)
Re: "It's always been my position that the effects are marginal,"
(Depends on your definition of 'marginal' I guess. :-)
Re: "... absent major changes in tax structure(as in the Reagan years)."
(Don't start with the caviats now... else you'll carve so many exceptions into the data that it wiggles like jello! <GGG> Remember, Reagan both lowered *and* raised taxes.... Obviously, the *entire world* is full of confounding factors. I'll grant that. But all Birinyi Associates was trying to measure was stock market performance under FOUR possible combinations of political control between the two parties... nothing else. Not enough data available to assign much correlation as it is. [If they'd tried to carve out a variety of *other* exceptions and 'special circumstances' from the already very limited data set, they would have had to go back MUCH FURTHER in history to re-expand the data set into something large enough to look at again --- and then they would be confounded by many more variables... historical drift, party changes, etc., etc. Jello again. :-)])
Re: "Where we are in a particular business cycle would be more relevant than the meddling of inept politicians."
Agreed. In principal, the influence of the business cycle is much larger.
"... Any data that only uses party control seems to be somewhat juvenile and short sighted, not to mention self serving."
How so? They had no axe to grind (& I assume the same for the WSJ...), they could have labeled the two parties "Party A" and "Party B" and it wouldn't change the data any....
I believe the 'point' that the data is making says little about EITHER party. Rather, what it particularly shows is that:
A) When *either party* gets sole control over the levers of power (all branches of government) the market's performance SUFFERS. (Why is this? We can only speculate, but perhaps it's because the bunch in control lose sight of the common good in their haste to shovel out pork to their base... and the markets don't react well to that. Or perhaps there are other reasons....)
B) When power is balanced between the two bunches (split between them), there is a demonstrable tendency toward more fiscal prudence (i.e., less run-away spending). Why? The answer to that one seems common sense --- the more 'mad-cap' spending plans favored by partisans on *both* extremes get stymied by the opposition from the other party... so FEWER and SMALLER new spending, new 'pork barrel' projects, gets enacted. The only spending that gets passed is what a workable majority of both bunches can approve of. And, that seems to amount to less spending.
Re: "In other words, I am loathed to give the bastards undue credit for things beyond their control, much less beyond their understanding."
Don't look at it as 'giving them *credit*' for anything --- they are mostly ALL spend-a-holics, and would deficit-spend freely if they could.
Divided government (some call it 'gridlock') though RESTRICTS their ability to SPEND... and, I believe THAT is what the markets LIKE (And that explains why the markets perform better with divided government).
Ceuterus paribus, of course! :-) |
