You might be wondering why the Obama administration seems so blasé about unemployment. Besides the fact that President Obama’s team has no workable ideas for fixing joblessness, its inattentiveness to labor might stem from its greater fixation on another set of economic metrics: the Dow Jones Industrial Average, the Standard & Poor’s 500 index, and other stock market measures. The White House is so full of New Age yuppie limousine liberals that it thought equity markets could supplant labor markets as the 21st-century measure of an administration’s handling of the economy. Obama has imitated the Occupy Wall Street movement and fully hedged his reelection strategy around the walls of the trading pits, a strategy that plausibly seemed like it might bring victory until last Friday when a terrible jobs report — fewer than one-half the expected number of new jobs were created — made the stock market and Obama’s reelection hopes swoon.
When the president’s numbers began to look up last December and into the first quarter of this year, his enablers began to credit a then-surging stock market. A left-coast news blogger, Doug Henwood, boasted, “Compared with the same spots in other presidential terms since 1945, Obama’s stock market is the third best, beaten only by Clinton’s second term and Eisenhower’s first.” He bolstered his argument with numbers. “Since the beginning of Obama’s term in office in January 2009, the S&P 500 is up 60 percent — twice the average of all the 18 presidential terms since Roosevelt’s third.”
So why are the Democrats so preoccupied with the stock market? Some are looking for an Oracle-like prophecy that the president can get things turned around and win. In fact, there is an impressive statistical correlation between the stock market and presidential election results. But at a higher level, I think that the Wall Street fetish of the president’s men and women stems more from a bristling concern that they are being portrayed as bad for business. Go back and look at their comments surrounding the data — they try to use the market as a means of deflecting any criticism of their business policies. Their argument goes, “Stock prices are up because corporate profits are up, so you can’t say that our administration is hurting business.” This perspective implies subtlety, as Democrat are prone to do, that everything starts and ends with government and public policies. The fact that businesses have had to dramatically increase productivity to surmount the greater costs of government regulation never seems to occur to them.
What’s also true is that the Democrats have portrayed stock market indexes, like the Standard & Poor’s 500, as a window on public opinion, a daily poll on their administration and the future it offers. One group of researchers described it poetically, saying “that social mood as reflected in the stock market is a powerful regulator of reelection outcomes and that voters unconsciously credit or blame the leader for their mood.” That was good spin when the market was moving up in the first quarter. But May was a disaster, a Facebook flop for most of its 31 days. Perhaps investors sold in May, so that Obama would go away.
David Hill is a pollster that has worked for Republican candidates and causes since 1984.