A consistent media meme since Election Day has been that Barack Obama was inheriting a recession that some believe began as far back as December 2007.
Since then, despite various rescue plans from his Administration, and the passage of a $787 billion stimulus package, the stock market has continued to plummet while employers shed payrolls in a fashion rarely seen in history.
This all raises an important question: will media ever blame current economic conditions on Obama, or will they continue to point fingers at George W. Bush despite his residence being in Texas?
Consider that as was reported by Bloomberg Friday, Obama now does indeed have his own bear market (image by Martin Kozlowski courtesy Wall Street Journal):
The Dow Jones Industrial Average fell 20 percent since Inauguration Day, the fastest drop under a new president in at least 90 years, according to data compiled by Bloomberg. The gauge has lost 53 percent from its October 2007 record of 14,164.53, slipping 4.1 percent to 6,594.44 yesterday.
More than $1.6 trillion has been erased from U.S. equities since Jan. 20 as mounting bank losses and rising unemployment convinced investors the recession is getting worse. The president is in danger of breaking a pattern in which the Dow rallied 9.8 percent on average in the 12 months after a Democrat captured the White House, according to data compiled by Bloomberg.
“People thought there would be a brief Obama rally, and that hasn’t happened,” said Uri Landesman, who oversees about $2.5 billion at ING Groep NV’s asset management unit in New York. “It speaks to the carnage that’s in the economy and the lack of confidence in the measures that have been announced.”
A bear market is defined as a decline of 20 percent or more. [...]The Dow average has dropped 31 percent since Obama’s election. The 30-stock gauge trades at 8.04 times annual earnings, the cheapest since 1995 and down from 10.06 times on Inauguration Day.
Down 31 percent since Obama was elected. Isn't some of that because of him, or is it all Bush's fault?
The Hoover Institution's Michael Boskin thinks Obama's largely to blame:
It's hard not to see the continued sell-off on Wall Street and the growing fear on Main Street as a product, at least in part, of the realization that our new president's policies are designed to radically re-engineer the market-based U.S. economy, not just mitigate the recession and financial crisis.
The illusion that Barack Obama will lead from the economic center has quickly come to an end. Instead of combining the best policies of past Democratic presidents -- John Kennedy on taxes, Bill Clinton on welfare reform and a balanced budget, for instance -- President Obama is returning to Jimmy Carter's higher taxes and Mr. Clinton's draconian defense drawdown.
In reality, as the markets are typically a discounting mechanism -- meaning they are normally forecasting events in the future based on the present -- this collapse in stocks since Election Day has to be partially as a result of investors' concerns about what the new administration would do once in power.
However, just how much that is a factor is indeed debatable given the financial crisis which began in September.
BUT, as many professional investors and traders felt the market had made a high-volume, hear-fear, final capitulation low in October with a successful test of that level in November, there seems no question that came from the Office of the President-elect, and out of the White House since January 20, has not been viewed as good news for the future of the economy.
This is especially the case given the 20 percent decline in stocks since the inauguration.
Will Obama-loving media ever come to this conclusion, or will George W. Bush always get the blame for economic conditions regardless of what Obama and a Democrat-controlled Congress do?