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

If you want to be president, act presidential

During this campaign season, we have seemingly lowered our standards. We are giving more than just one front runner license to say just about anything about any one or group without repercussion.

To me, if someone wants to be president, they should act presidential. These candidates are interviewing for one of the most important jobs in the world. We should expect the candidate to exhibit the traits we would want in a leader who interacts with other leaders.

That would mean telling the truth and not being so cavalier when your statements are shown to be untruthful or inconsistent. That would mean not disparaging someone asking a legitimate question. That would mean avoiding labeling and name calling others about perceived deficiencies. That would mean showing a little thicker skin and calming demeanor in the face of adversity.

My view is relatively simple. The louder someone yells to drown out another or the more name calling that person uses, usually means his or her argument is poor. We often mistake leadership with a false bravado. There has been an interesting trend in the corporate world with more introverted leaders. The reason is businesses are complex, so they need to be led by someone who has a grasp of the issues.

People will vote for whom they want. I would like them to consider this litmus test as they do, as they may reach a different conclusion.

The Legacy of Watergate Lingers On

Yesterday, I stumbled onto a movie I had not seen in a while, so I decided to watch it again. “Nixon” starring Anthony Hopkins in the title role was made in 1995 and directed by Oliver Stone. Hopkins had a little trouble looking the part, but he more than made up for it with his terrific version of President Richard Nixon. Joan Allen played his wife Pat Nixon and does a splendid job as well. Seeing the President’s wife role played behind the scene was illuminating as we only got to see a stoic supporter of her husband in real life.

As you watch the film, you have to remind yourself you are seeing an Oliver Stone directed version of the facts. Setting that aside, having lived through Watergate, President Nixon did authorize and cover-up some very bad things, so he resigned before he would have become the first president to be impeached. There a few moments in my life where I can remember where I was when a major event happened. Nixon’s resigning was one of those moments. I was actually attending the very first football game of the newly created World Football League. They actually broadcast his speech as the start of the game was delayed.

I have read several books about Watergate and the peripheral actions: “Blind Ambition” by former White House Counsel John Dean and “Will” by one of the Nixon ‘plumbers’ Gordon Liddy  and watched three movies – “All the President’s Men” about the Washington Post reporters Bob Woodward and Carl Bernstein who broke the story (must see), “Blind Ambition” a mini-series starring Martin Sheen as Dean, and “Nixon.” And, like millions around the world, I watched the Watergate Senate hearings which were run by Senator Sam Ervin of North Carolina.

Yet, seeing “Nixon” after several years left me disturbed all over again. However, in addition to being disturbed by the crimes committed by Nixon, his Chief of Staff H.R. Haldeman, Dean’s predecessor and Nixon confidante John Ehrlichman, Attorney General John Mitchell and several others, I had an unfortunate illumination into contemporary politics that is disturbing. You see the legacy of Watergate lives on in certain places and we need to continue to shine a bright light on actions that are not conducive to fairness and good governance. What do I mean by this statement?

As context, Nixon is a prime example of how power can corrupt. While he did oversee some good things – passage of the Environmental Protection Agency, opening markets to China and the Soviet Union and overseeing job growth while he was president –  he sold his soul to the devil to get there. He was beholden to some huge oil/ gas industry funders and the likes of J. Edgar Hoover, who was actually far worse than Leonardo DiCaprio played him in the movie “J Edgar.” Nixon was also extremely paranoid and went out of his way to squash his enemies and do one thing that eventually led to his undoing. He taped his conversations in the oval office.

Where the movie haunts me looking at today’s events through its lens are in two areas. First, the decisions made by our Supreme Court and other actions that allow wealthy donors to exorbitantly fund election campaigns with little repercussion is very alarming. When you see examples of the pressure put on Nixon and his predecessors by wealthy business interests, it shows how easily the office can be used to their advantage. This past election season we saw a group of funders literally trying to buy an election. Whether you agree or disagree with the positions of the Koch Brothers, the fact they can pony up hundreds of millions of dollars to promote a campaign goes well beyond believing in a particular cause. They are buying a center of influence and that is not right. There are several points in “Nixon” where you see an earlier version of people like the Koch Brothers telling Nixon what they wanted him to do. We must modify this type of funding for the next election process.

Second, I saw too many similarities to today’s Republican Party in this movie. I saw the moral majority being referenced in different ways as the only way to combat the liberal eastern establishment. I saw references to the religious right as the only way to defeat the demonistic protestors who did not want to fight a war where we were bombing innocent people in Cambodia and Vietnam. I saw references to the people who disagreed with his version of America as communists, which held additional  importance given Nixon’s role in crucifying Alger Hiss and others before he became Vice President to Eisenhower. And, still fresh in my mind, I saw the purposeful manufacturing of evidence against people to game the election. It was so severe that one of the impeachable crimes listed was defrauding the election process in 1972.

You see Watergate was only part of the crime against Nixon. Nixon created a White House based spy agency that was called the “plumbers” so they could plug leaks to the press. They also bugged and broke into the National Democratic Party Headquarters based at the Watergate Hotel complex. But, they did more than that. Under the guidance of Jeb Magruder, they disrupted their adversaries’ campaigns. In particular, Senator Edmund Muskie was a target, as Nixon did not want to run against Muskie. He wanted to run against the more liberal Senator George McGovern. Their antics got Muskie to drop out of the race.

To me this equates to the fairly recent action of President George W. Bush to manufacture evidence (the infamous weapons of mass destruction) to lead us into an invasion of Iraq. And, to make the story complete, one of George’s men, Scooter Libby took the fall for the distortion of evidence and discrediting of a CIA operative, Valerie Plame (check out the fairly recent movie “Fair Game” starring Naomi Watts and Sean Penn). Libby worked for Karl Rove, a name we all know these days. Libby’s falling on the sword ended the affair, but speculation by smarter people than me abound about further culpability.

Yet, the more troubling resemblance is the blatant manufacturing of stories and data to discredit the opposition deployed by the current Republican Party. I like to add both parties do their fair share of perfuming pigs, yet with the puppeteering of a news agency to distribute calculated messages, the GOP has this down to an art form. I left the GOP to become an Independent for three reasons – their stance on global warming, their unhealthy embrace of the evangelical right, and their higher preponderance to fabricate information. This last point is not said without due consideration as it is extremely important to my thought process. You may not agree with me, but this is how I feel.

Our country needs good dialogue around the issues using good information and not someone’s version of the facts. I see a political system that needs to change to weed out the problem areas. I agree, in part, with my friend Mrs. N who says the wealthy never had it so good in our country. We need to assure the American people they do not become the Robber Barons of the 21st century. I don’t want the “haves” gaming the system to a degree they can spread misinformation and disinformation to get what they want. I have said it several times before, given the weakness of the GOP platform and candidate they put forth as contrasted with an imperfect President who had done a better job than given credit for, this election should not have been as close as it was and the President should have won in a landslide. The monied interests made it close.

I want the GOP to return to legitimacy as our country needs them to be so. Many in our country are like me, socially liberal, but economically conservative. I want us to help people climb ladders out of poverty, but I want us to invest in them and not just give them money. In the long run, that helps no one. We need thinkers and leaders with good hearts and good heads. We do not need monied interests calling the shots telling people how to think. And, we need to squelch the legacy of Nixon and get rid of disinformation and misinformation tactics.

I will leave you with Nixon’s line which he repeated often trying to convince the American people as much as himself. “I am not a crook,” he would say. Unfortunately for us, yes you were President Nixon.