W. Bush is shattering records for the worst first 18 months in office for
a U.S. president as measured by the benchmark Standard & Poors 500.
In his first year-and-a-half in the White House, Bush presided over a 36.9
percent decline, almost twice the percentage drop of Herbert Hoover, the
president who led the nation into the Depression.
Hoover recorded an 18.6 percent decline and now ranks
third from the worst, with Richard Nixon in second place with a 23.6
percent fall in his first 18 months. In other words, in the 75-year
existence of the S&P 500, no president has seen the stock market index
fall as much as one-quarter, before Bushs decline of more than
Ironically, given the Republicans
business-friendly reputation, the four worst performing stock-market
presidents in the first 18 months are all Republicans. Ronald Reagans
15.3 percent decline joins Hoover, Nixon and Bush at the bottom. The top
two performing presidents, as measured by the S&P in their first 18
months, are Democrats, Lyndon Johnson at a plus 27.5 percent and Franklin
Roosevelt at 55.1 percent.
Bill Clinton ranked sixth with a 4.2 percent gain in
his first 18 months.
While almost doubling Hoovers decline in the
S&P, Bush trailed the Depression-Era Republican slightly in the
blue-chip Dow Jones Industrial Average, which measures the performance of
30 top U.S. companies. In Hoovers first 18 months, the Dow fell 24.8
percent. In Bushs 18 months, the Dows drop was 24.3 percent. [NYT,
July 22, 2002]
Though some presidents reversed the early returns of
the stock markets, Bush has so far failed to inspire confidence either
with his personal performance or his policies. The stock market has
greeted speech after speech by Bush with double-digit declines in the Dow.
The pace of the stock market crash under Bush also is
accelerating. In the 10 trading days since Bush visited Wall Street to
promote his economic plans, the Dow has dropped almost 1,500 points or 16
percent. [NYT, July 23, 2002]
The Bush speeches have done little to persuade
investors that happy days are here again or for that matter, likely in
the foreseeable future. Bushs top economic proposals speak to different
conditions than are apparent today.
His demand for a permanent repeal of the inheritance
or death tax had more appeal to Americans who were watching their
stock portfolios swell in the Clinton Era, along with their inflated
dreams of multi-million-dollar wealth to pass on to their descendants.
Now, after a battering of their net worth, many of these Americans are
simply hoping to have enough money to pay for a modest retirement.
Fast-track trade agreements also are out of sync with
a world far less enamored of U.S. economic leadership. Further,
deregulation of industry and tort reform -- backed by Bush and Republicans
in Congress -- have helped unleash some of the avarice that led to
corporate collapses at Enron Corp., WorldCom Inc. and other companies.
Missing from Bushs economic plan is any initiative
that can inspire Wall Street with visions of economic expansion. By
contrast, the Clinton-Gore administration promoted technological advances
like the Internet that created a framework for the private sector to
innovate. In Election 2000, Vice President Al Gore also proposed a
partnership between government and industry to develop environmentally
friendly vehicles and alternative energy sources, in part, to prime the
pump for economic growth.
Major stock indexes are Wall Streets rough
measures of expected business growth. At least during George W. Bushs
first 18 months, investors are judging that those expectations are lacking
on a historic scale.