Why don’t more business people and investors vote for a Democrat Presidential Candidate?

Before some scoff at this question, let’s look at some data. We investors and business people are supposed to maximize shareholder and business value are we not? If that is the key goal, would we not want to vote for the party, who on average, increases the value the most? So, we should vote for the Republican candidate for President, as this party has touted they are the party of business and jobs – right?

Well, I hate to burst the bubble of some and surprise even Democrats, but the party who occupies the White House when the stock market performs the best, on average, is when a Democrat is in charge. And, on average, it is not even close.

Per a 2012 study performed by Colin Cieszynski, a Senior Market Analyst for CMC Markets, Canada, when the stock market performance since 1900 is reviewed, there are some surprising results.* Under 734 months of Republican White Houses and 617 months of Democrat White Houses (43 months of President Obama’s term were included), the following results are in evidence:

  • the average monthly rate of return under Democrat leadership is 0.73% per month, while the average monthly rate of return under Republican leadership is 0.38% per month, about half as much as under Democrats.
  • yet, the average risk as measured by monthly standard deviation is less under Democrat leadership, which is the opposite of what you would expect given the above return at 5.22% versus 5.56% under the Republican leadership.

However, let’s not stop there. Under which White Houses, on average, are the most non-farm payroll based jobs created? Again, I hate to burst the bubble of Republicans, but it is under Democrat White Houses. And, as before it is not even close. Using the Bureau of Labor Statistics after 1941 and estimates before dating back to 1921, there have been 12 Republican White Houses and going on 12 Democrat White Houses, with one year to go.** With the counter still running on President Obama’s administration, the following results are in evidence:

  • there have been over 82,000,000 jobs created under Democrat White Houses through January, 2016.
  • there have been just under 36,000,000 jobs created under Republican White Houses through January, 2016.
  • ratioing the two jobs created numbers results in a ratio of almost 2.3 to 1 in jobs created under Democrat leadership than under Republican leadership.

I fully recognize the President position gets too much credit and too much blame for the economy. Yet, they do provide headwinds and tailwinds. I also recognize that individual leaders are different under both parties. Under Bill Clinton, more jobs were created than under any other President and he was the second best President behind Republican Calvin Coolidge during the roaring twenties on average monthly return. Ronald Reagan was the third best job creator, but fell to sixth in average monthly return. FDR rated second in jobs created and fifth in average monthly return.

My point is we should be asking questions as to why this is the case, especially since it runs counter to campaign and party rhetoric. My thesis is we tend to invest in the economy more through infrastructure investment under Democrat White Houses. Not only do these investments improve assets or build new ones, they create jobs as well.  It should be noted that both Clinton and Reagan were big on trade agreements, as well, which fueled growth. While his job growth numbers were low since we were at full employment in the 1950s, Dwight Eisenhower continued investing in infrastructure building off FDR’s new deal and the stock market performed at the eighth best level on an average monthly return basis.

So, what about President Obama? As of January, 2016, there had been just under 9 million net new jobs (counting the lost jobs due to the recession when he took office), which will likely grow to net 11 million or more by the end of his last term. That would place him in 4th or 5th place in net jobs created since 1921. And, through his first 43 months office as measured in the CMC Markets study, he was in 5th place in average monthly return. I have not seen updated numbers, but he would still have a pretty good ranking, since the stock market has doubled while he has been President.

So, back to my question. If the goal is to make money, then on average the party that is the better enabler is the Democrats based on these economic measures. Please review the attached sources for any questions you might have.

*http://blog.cmcmarkets.com.au/asset-class/companies/what-does-the-us-presidential-election-mean-for-markets/

**https://en.wikipedia.org/wiki/Jobs_created_during_U.S._presidential_terms

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11 thoughts on “Why don’t more business people and investors vote for a Democrat Presidential Candidate?

  1. I taught international business and ethics, ironically while they should need one another the opposite was true. Everyone wants to know how to make money, few wish to learn or be reminded of ethics. Too many liberals are armchair liberals, whilst conservatives act and rarely change sides. It is the perplexing nature of selfishness, that explains a neccessary bias for parties that will keep taxes in check, without the insight to see, all things are connected. Case in point, objection to funding mental health, the biggest reason for reduced productivity. Untik people quit living for now and consider 100 years hence .. but why would they? Ego dictates, if I’m not at the pArty who cares?

    • Candice, thanks for your comment. Thanks for sharing a little more of your background, as well. Decisions that impact future problems require political courage. Denmark is below sea level, so they had to come up with a climate change plan that would last into the future surviving new leadership elections. With our zero-sum game politics (I must win and you must lose), it is nigh impossible. It took many years for us to pass a transportation bill, which was a no brainer especially with low interest rates. What frustrates me are ethics are now situational and data is less important, as each party can cite their own data. Look at Trump, he just spews untruths right and left and says everyone else is lying. It is OK to believe strongly, but do not eschew facts or discount the others’ arguments.

      I think you hit on the reason I blog. I do my best to see the inconsistencies, hypocrisies and lack of information use. I am socially conscious, but want to see a Return on Investment. We need to set in motion actions to help, but measure things and improve the action if needed. With this charity for homeless families I am involved with, that is what we are all about. We measure outcomes and help people climb a ladder to success. Because we measure, we can improve and have improved our model.

      Your example on mental health is a good one. Not funding Planned Parenthood is another as they actually reduce the number of abortions, unplanned pregnancies and poverty which is correlated with larger family size. Great comment. Many thanks for sharing it, Keith

      • Dear Keith, do not ever stop blogging, your words count. If we did not call out those inconsistencies then who? In the Jewish faith they say, if not now then when? We may be in an overcrowded planet but each of us counts. You do good things. I had a good vibe from you early on, I’m rarely wrong about those kinds of things. I call you friend in the truest sense.

      • Candice, many thanks for your comments and I will do my best to live up to your vibe. Your comments are most welcome as is your poetry and prose. Calling out inconsistencies is a full time effort and we each need to be truth seekers. I believe we have too many debates around information that is not true, but has been presented as such. Thanks for your confidence in my words. It is greatly appreciated. Keith

      • Have you ever listened to The Conspiracy Show by Richard Syrett? Don’t agree with it all but i find he brings up fascinating subjects. It’s online radio. LMK.

    • Great line from Mr. Martin. What I find of interest is people, even Democrats, have a hard time believing this data and do not espouse it. It is a byproduct of the GOP owning its own news network. The GOP has spoken their own mantra for so long, even Democrats believe the GOP party line. “Job-killing Obamacare,” “Failed Stimulus” and “Global warming is a hoax,” are three standard lines fed and believed by far too many, yet none are true. Many do not believe the economy is doing pretty good as it as inconvenient truth to the GOP, so they just pretend it is not true. One of the other sad truths is with the GOP having The Donald on debates increases the audience to hear more untruths. They see so many folks saying it, then it must be true.

  2. No matter what the statistics are average people will always vote for the rhetoric that strikes a cord with them. People believe what they want to believe and are gullible to whatever sounds good. With the internet and so much information available there is equal if not more falsehood out there. False information seems to snowball faster than the truth.

    • Kim, unfortunately you are correct. Trump said earlier this week that the unemployment rate was not really 4.9%. He said he read it could be as high as 30% or even 40%. If it were that high we would be in a serious depression. The absence of truth matters not to him, which should be an indictment by itself. Thanks for your sober, but correct comment. Keith

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