Do you like money? October 14, 2008 Jill If you’d rather not keep yours (or prefer that it didn’t grow all that much), go ahead and vote for John McCain.
For those of you who are not market savvy, this theory makes no sense. Tommy McCall is cheating. If he’s basing his theory on how the markets worked historically from 1929 onward, than he cannot exclude Hoover. And he most certainly can’t base this theory on the S&P index alone because he hasn’t factored in the market’s volatility (gains and losses), if the feds affected the rates, what stocks make up the portfolio, what key economic sectors played a role, what effects the other indexes had on the market and so on. There are just too many missing variables. So, a democratic administration is no more likely to gain you more money than a republican administration would have you lose more money. One more note: the 1929 crash happened because President Hoover would not bail the banks out.
Not your best work, Jill. First, why exclude dividends? It systematically overvalues some assets (say tech securities during the bubble under Clinton) where money grew in publicly exchanged securities themselves as opposed to, for example, when returns were strong, but it was strong in areas (banking) that historically pay a lot of dividends (such as the 80s after 87 or the last 10 years before last month). Moreover, all of the major ups and downs of the stock market were the product of both parties and decades long trends. That is as true during the bear market today as it was in the collapse of 1929. Blaming it on the man in the white house when these things hit the fan is idiotically simplistic — at best. I’m one of the biggest Obama supporters you’ll ever meet, but I have to draw the line somewhere. W. and other Republicans have so much we can actually blame them for. Let’s stick to, ya know, what’s real. Moreover, we can also have a real conversation about “money in pocket” issues. McCain and Obama differ substantially in their plans for my and (assuming you’re in biglaw now) your tax rate, especially if FICA caps are removed. I’m prepared to pay that higher rate. In fact, I desperately want that higher rate so baby boomers get in on at least some of the burden before they retire and don’t free-ride entirely off our generation. Again, though, let’s be honest. In our bracket Obama means significantly higher taxes. It’s for the best, but no need to distort the truth.
Yes yes, it was clearly and overly simplified and tongue-in-cheek post, pointing to an over-simplified (but interesting, in my opinion) article. Nothing more.
There are plenty of less-oversimplified articles out there making essentially the same claim as Tommy McCall. I linked to one myself a week or two back. Over the past few days, Theo Gray, one of Wolfram Research’s founders and a democrat who donates to presidential campaigns, decided to check McCall’s figures himself by building a model in Mathematica. He and various of the Wolfram folk spent a day or so bickering over the precise assumptions involved, but he has this afternoon published his findings, which — unsurprisingly — show that based on the assumptions McCall makes, he is basically correct, but that there are many other legitimate ways to calculate returns under democrats vs. republicans, and (as Angela points out) results vary widely based on your assumptions. Theo published his findings and his toy model (which you can play with for yourself) on the Wolfram site this afternoon. Theo’s blog post is here and his downloadable model is here.