• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Buy the Rumor, Sell the News

    Americans have long viewed the Dow Jones as an index of measure when it came to the general economy. While it is by no means a perfect measure of the economy, it sits in its own highlighted box on all of the major news channels for a reason. Because Americans assess our economic strength by this average, it may be telling to see how it performs in certain situations.

    Earlier this week in The Hill, Dick Morris said of President Obama:

    President Obama, in his pursuit of liberal big-government spending, has totally neglected the role of the president of the United States in reversing global panic. To the contrary, his every remark and the constant preoccupation of his Cabinet is to heighten the sense of crisis and to escalate the predictions of doom if we do not do as they tell us and raise spending now and taxes later. Instead of being a firewall, reassuring Main Street even as Wall Street crashed, he has become a conduit of panic, spreading the mood of desperation from the stock exchange floor to kitchen tables across the world.

    This was interesting, because enough time has elapsed since President Obama was elected, sworn in and with a couple signature measures under his belt to see the effect his policies are having on the economy. And what better way than to see how the Dow Jones Industrial Average has reacted to some of his biggest days since taking office.

    • November 5, 2008: Dow drops 530 points the day after President Obama is elected.
    • January 20, 2009: Dow drops 359 points the day the President delivers his inaugural address.
    • January 28, 2009: The House passes their stimulus proposal after trading hours. The next day, the Dow drops 224 points.
    • February 9, 2009: President Obama has his first prime-time press conference, followed by Treasury Secretary Geithner’s speech on the credit markets the next day. The Dow drops 381 points on February 10.
    • February 13, 2009: The House passes the conference version of the stimulus bill in the afternoon, and the Dow closes 83 points down. After the Senate passes the final version late in the evening, the Dow drops 343 points the next day.
    • February 17, 2009: The President signs the stimulus bill into law in Denver, CO. The Dow drops 293 points.
    • February 25, 2009: The Dow drops 226 points the day after President Obama delivers his address to a Joint Session of Congress.

    Now, this type of data runs the risk of cherry-picking. So, in 2008, the Dow under President Bush averaged a loss of roughly 86 points per week. Since taking office, the Dow under President Obama dropped 1,217 points and has averaged a loss of approximately 202 points per week, or roughly 43 points per trading day. This is a rate approximately 2.5 times greater than under President Bush last year.

    So, it would lead some to believe that Wall Street, investors and American consumers are not responding to President Obama’s tax and spend philosophy.

    Dick Morris continues:

    So, having inherited a recession, his words are creating a depression. He entered office amid a disaster and he is transforming it into a catastrophe, all to pass every last bit of government spending and move us a bit further to the left before his political capital dwindles.

    It appears the right solution for America may be less speeches by the Obama Administration, and more reassurances that the future isn’t all taxes, spending and deficits. That type of language would be a great step to recovery.

    Posted in Ongoing Priorities [slideshow_deploy]

    22 Responses to Buy the Rumor, Sell the News

    1. Bob Buege Lakep says:

      The trouble with Obama and government in general is they persist in meddling with and getting in the way of "we the people" and not taking care of the matters government is mandated to do. Responsible oversight instead of the exercising of partisan and personal quest for power and a little concern for the nation would have prevented this whole mess.

      The Constitution needs to be enforced and We the People are the only ones that can do it. They need to be held accountable personally and collectively.

    2. Ozzy6900, CT says:

      So are we saying that the Dow is not in favor of the Anointed One? Even President Carter paid attention to the Dow in the early stages of his Administration. President Obama and his Administration have no interest in the Dow because they are members of the Left and the Left has no use for the Dow and Capitalism. That is unless they happen to make a shrewd investment that lands them a ton of cash!

      As far as the "chicken little" syndrome, President Obama and his Administration must keep the "effect" going. As long as they can generate fear, the Obama Administration can do anything they want. Everything is a CRISIS, every fix must be done NOW! This is no way to for a President to run our Country.

    3. JayBee, WI says:

      Ok, We can see the way this is headed. What do We the People do next? We can not vote them out soon enough but is that our only option at this point? My Congressman and Senators only respond with the "crisis" mentality – there is no reasoning with them.

      So, give me any suggestions for an ordinary citizen to further the concepts of financial responsibilty and the limits of federal power as the constitution originally intended.

    4. Donald, in Virginia says:

      Everyone is giving their opinion as to what is happening to the economy, and the country, and why. If none of what Obama is doing is good for the country, what should "we the people" do to stop him? It would seem to me this needs to be nipped in the bud.

    5. ra,ohio says:

      Put your 401ks in cash until this idiot is undermined to the degree that he can't hurt your finances anymore.

    6. Angry Dumbo says:

      Impoverish your opposition. Obama will not out and say it, but he is kicking the crap out of the very people who would challenge him waiting for a cry of mercy. I don't think he will let up. He does not care about Dow 5,000, 2,000 or 1,000. The lower the markets go, the more power he and our federal government have and the less resources the investor class have to oppose him. This is shrewd and he is going to win a second term.

    7. Rick Josey, North Ca says:

      President Obama knows that fear is a great motivator. So he's generating more and more fear to move his liberal agenda through Congress. And it's working. Do not expect him to take the "high ground" in any situation when the low ground works. Opportunists do what's convenient and whatever works.

      Psychiatrists were warning us, before the election, that Obama suffers from NPD, Narcissistic Personality Disorder. This is the same affliction that all tyrants share. That's why he's ramming his agenda upon the American people, and disregards the wishes of the populace. We are in for a rough four years.


    8. David, St. Louis says:

      The percentage drop per day under Obama, which is I think more important, will be even greater than it was under Bush. (The DOW can only fall so far, after all.)

    9. Mark Smith, Greenwoo says:

      Calvin Coolidge said, "After all, the chief business of the American people is business. They are profoundly concerned with buying, selling, investing and prospering in the world." Coolidge lowered the top tax rate, stood back and watched the econmy prosper. Businesses saw a known environment and jumped in full measure.

      Hoover and Roosevelt tried to fix things by raising tax rates and spending. The result was that businesses didn't invest, didn't take risks, didn't employ, and the economy stagnated as long as these policies persisted.

      Obama is another FDR; he's presenting an unknown environment to businesses so they aren't incentivized to take risks and therefore won't. Obama will continue his redistribution of scarcity until we correct this imbalance of power in the 2010 and 2012 elections. To that, at least, we can look forward.

    10. Sandra Herman, Arlin says:

      I feel bad for Obama. He walked in to a mess and surely there are enough people out there who didn't want to see him president. He is doing what he can, just remember congress has a lot to do with what is being done. Everything suggested by Obama needs to go through congress….

    11. Sam, in Qatar says:

      The entire agenda involves a one world currency. When it gets all the countries money involved, finally the suggestion will be introduced to have a one world currency. Once this is brought about we will then be ushered into the new order we've heard about for generations. Buy gold and get everything in order for when the money is no good anymore. You need to have in place all your contengencies, this is the day we've been planning for. Remember everyone was laughing about this a while back and we were crazy for entertaining this scenario. New World Order is here, brought to you by BHO, NOT GWB.

    12. Denny, Wisconsin says:

      Ozzy, excellent points! This makes me wonder, what if these same lefties are making money hand over fist by "short-selling" or whatever it is traders do when they know the stocks will drop? (it's obvious I don't do stocks, sorry.) Or perhaps you are implying that very idea! I have a hard time believing such politically astute characters as this Pres and his majority party are unaware of their effect on the economy. I really feel it is a deliberate push to institute Socialism (at the least) as a panacea to a deliberately trashed economy, in my opinion.

    13. Seth - Litchfield, C says:


      Experience suggests that it is better to use directional movements of market indices as a precurser of fundamental developments rather than where they are or have been. We say watch out below.

      See http://www.beforethenews.com

    14. Sliver Wisconsin says:

      Sandra you feel sorry for Obama, give me a break, he knows what he is doing and is definetly in bed with congress.If you know anything about history these stimulus plans have never worked in the past. Obama's plan is Socialist/Communist bent on controling the masses. If he was interested in improving the economy he would stop preaching doom and gloom and start giving tax cuts to small businesses and the the people that make this country move. I suggest you brush up on history and economics, this guys job is to run the government and not the people.

    15. Phil, NC says:

      Read the Bible. You will see where you and this country are going. Resist the evil ones (unethical and immoral politicians) as long as possible.

    16. Kent, Virginia says:

      We have no proof Barack Obama is a citizen of the United States. He is paying a phalanx of lawyers to keep his complete birth records and Harvard records sealed. Why?

      Obama got his degree in Constitutional Law. He knows the Constitutional requirements for an individual to be President, every other candidate provided ample proof of citizenship, why is this man the exception? Does he really have the prosperity of our Nation at heart? His actions–and their obvious contradictions of his rhetoric–thus far raise many questions. Who is Barack Obama?

    17. Sue, Agoura Hills says:

      O.K., so we baby boomers did the right thing, we've worked hard, saved to buy a house and invested what we could in our 401k's. Now, we are watching them evaporate. People are saying take everything out and put it in savings, but then you have to pay taxes! I'm not sure what to do? It isn't getting any better, in fact, I'm looking for a job so I can help my husband, who is self employed pay our bills! I have a lot of experience, but have been out of the work force for 4 years, so it is difficult to get my foot in the door. This is scary, we have a mortgage, bills and our 10 year old grand daughter to raise and aren't sure how we'll survive through next month, let alone 4 years! We don't want to lose everything, and don't want the government stealing our money. Where are the conservatives who are supposed to fight for our country? What is happening to the land we love?

    18. Pingback: Various Notes Of The Fisc « 36 Chambers - The Legendary Journeys: Execution to the max!

    19. Marshall Hill MI. says:

      Every day he speaks of Doom and Gloom.Are we being

      Conquered from within? Think hard,this guy is no

      Dummy,but very calculating!

    20. Victor, South Caroli says:

      Isn't it a little late to question the validity of Pres. Obama's birthplace (certificate reportedly being witheld from the public)? One would think this is a key item to be vetted, BEFORE one is elegible to run for the office of President of the United States of America. Where were those actually responsible for ensuring the basic qualifications (especially one as rudimentary as this item). Furthermore, where was the illustreous "major media"? One could bet this would never be up for questioning, had the Party affiliation been that of the "Elephant". Ya' think? The USA citizenry has a right to know……., Respectfully submitted.

    21. El Jimbo, El Paso says:

      This article is nothing but cherry-picking. I wonder what the author would have to say now after the recent run-up in the DOW? Watch out though, we're due for a pull-back, but not all the way to DOW 6000, so take profits now. Even though I don't agree with everything the Obama administration has done, I think he is doing great. This whole calamity was caused by greedy bankers and politicians using the Federal Reserve to socialize the losses and privatize the gains. As long as we let them do it, it will keep happening. And as for taxes, this isn't about that. The Laffer curve points out that there is an optimum taxation level that maximizes government revenues, so the arguement shouldn't be about lowering taxes, but instead about optimizing tax rates. Why do conservatives believe that tax cuts are the only valid solution for any problem? Oops, I stubbed my toe, but I guess I'd feel better if I had a tax cut!

    22. Steven Brann says:

      This administration has helped me realize a profound life changing point,that "We the People" should be governed by God from the heart. William penn said it best, "be governed by God, or ruled by a tyrant."

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.