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 | Friday, October 17, 2008 at 13:48:50 mst
Comment ID: #1
Name: Michael Labeit
E-mail: logician169(at)yahoo.com
URL: http://themethodoflogic.blogspot.com
If heard this claim before - that the growth of the value of financial assets increases under Democratic presidents more so than Republican presidents.
I think however that this assertion can be, (and is) used to befuddle uncritial, easily deceived American voters. Correlation is not causation, but how many people in the American electorate are aware of this? For instance, Charlie Gibson in his interview with Palin made the claim that the economic growth we experienced in the 90s occurred at the same time the Clinton administration was in power. Yet if one watches the video, Gibson clearly said it in a way as to assert that the Clinton administration was the cause of that economic growth.
Economic growth certainly corrolated with the Clinton administration but the Clinton administarion certainly was not the cause of that economic growth. Economic growth exists despite government intervention, not because of it.
The fallacious but cunning insinuation that correlation is causation and the idea that the coercive instruments of governemnt can prompt economic growth - both of these claims lie implicitly within the intentions of those at the NY Slimes who published this report. |
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| Friday, October 17, 2008 at 14:13:46 mst
Comment ID: #2
Name: Michael Labeit
E-mail: logician169(at)yahoo.com
URL: http://themethodoflogic.blogspot.com
And another thing...
If you notice, on the graph, market value growth under the Hoover administration plummeted and thus serves to completely debase the Republican average. In statistics, this is an example of an "outlier," a statistical phenomenon who's numerical value is radically different from the average of a set of numbers, either radically negative or radically positive relative to the average.
Imagine if Bill Gates decided to teach at MIT. The average income per faculty member would skyrocket into the billions as a result, but statistically, this would be a highy inaccurate method of measuring income per faculty member.
Regarding the correlation between Hoover's administration and the stock market crash and subsequent Great Depression - again Hoover's administration corrolated with these two unfortunate events but the cause of these two events certainly isn't entirely his fault. The Federal Reserve is the primary villian in this never ending saga, an institution established under Wilson's administration. Wilson was a progressive democrat and the Federal Reserve Act was spearheaded by two other democrats, Carter Glass of Virginia and Robert Latham Owen of Oklahoma.
The vain, pre-preschool attempts by the NY Slimes at pushing economic interventionism are completely transparent. |
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| Friday, October 17, 2008 at 15:37:16 mst
Comment ID: #3
Name: Sajid
>If you notice, on the graph, market value growth under the Hoover administration plummeted and thus serves to >completely debase the Republican average.
Good call Michael. I would have totally missed that if you hadn't pointed it out. Yes if we neglect Nixon (watergate), Bush (iraq war) and Hoover (great depression), the average rate of republican presidents is actually higher than if you did the same for democrats, even if you just took the top 4 democratic presidential terms (10.73 to 9.65 % in favor of the republicans). I would say this graphic, on its own, does not prove very much at all. |
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| Friday, October 17, 2008 at 16:22:27 mst
Comment ID: #4
Name: Alfred Centauri
E-mail: alfredcentauri(at)bellsouth.net
Comparing this chart with the S&P historical price chart is eye opening.
First, it is easy to see that these 'results' are dominated by the two speculative bubbles during the last two administrations. This renders the 'conclusion' suspect.
Second, looking at the growth trends before 1995, the conclusion that there is greater growth during Democratic administrations is clearly wrong. There is a 'kink' - a sudden positive change - in the slope of the growth line corresponding to Reagan taking office. Before that, there doesn't appear to any significant difference at all.
Third, if one projects that higher growth line forward to 2008, the S&P is now about where it 'ought' to be.
Lastly, the 8.9% growth rate is highly misleading. If one invested $10k in the (non-existent) S&P 500 on the day FDR took office and then removed it to a non-interest bearing account during any Republican administration, they would indeed now have about $300,000. However, it would have taken about 68 years to achieve that, not 39.5.
That works out to 5.1% annual return. On the flip side, Ike took office about 55 years ago so the Republican rate would be more like 3%.
But... take the Clinton and Bush bubbles out of the picture and:
Democratic growth rate, 1933 - 1981: 5.0%
Republican growth rate, 1953 - 1992: 5.4%
Not much to see here folks. Please move along. |
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| Friday, October 17, 2008 at 21:34:33 mst
Comment ID: #5
Name: Richard Watts
E-mail: rw1963(at)earthlink.net
"Economic growth exists despite government intervention, not because of it."
Certainly. And if the Republican Party were in truth the party of liberty and free markets, we would see a huge repeal of government intervention of all kinds during periods when government is dominated by the Republicans. We would see the Republicans consistently voting against statist laws, on principle. Instead, Republicans pass more and more laws against our liberty and property. If the Republican Party were even truly for "less" government, we would see government shrink when Republicans hold the reins -- but that is not the case. No, correlation is not causation. But economic problems have causes. What are the causes of the periods of economic distress? Government interference sure causes economic problems. Republicans sure do a lot of interfering. It's not just the Democrats. Try advocating laissez-faire capitalism and real individual liberty to a conservative. You'll have yourself an opponent -- they won't stand for it.
"But... take the Clinton and Bush bubbles out of the picture and:"
Why disregard the bubbles? Economic phenomena during the Bush and Clinton administrations had causes too. Besides, isn't recent history even more relevant than what happened 50 years ago, to understanding what the Republican and Democrat parties are now, and what behavior we can now expect from them?
"Democratic growth rate, 1933 - 1981: 5.0%
"Republican growth rate, 1953 - 1992: 5.4%"
Why compare one time period for the Democrats to a different time period for the Republicans ?
"Not much to see here folks. Please move along."
I see something. If in fact the growth rate is about equal under Republicans as under Democrats, and if the growth rate in a given period (or rather the degree of inhibition of growth) is due to the administration of that period, or to the previous administration, then this would mean that the Republicans retard growth as badly as do those sworn enemies of free markets, the Democrats. If so, and if (relatively) unfettered production and trade are the source of (increased) economic growth, so much for the Republican Party as the defender of the free(er) market. |
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| Friday, October 17, 2008 at 21:59:17 mst
Comment ID: #6
Name: KPO'M
E-mail: ka84796(at)comcast.net
Interesting observation. As some of the other posters have (perhaps unwittingly) pointed out, statistics are easily manipulated. However you slice the data, though, it seems pretty clear that government intervention doesn't get any smaller during Republican administrations. Even before 2008, Bush II imposed the TSA, Sarbanes-Oxley, and the Medicare prescription drug program on us, among other things. Perhaps you are right that the GOP makes for a better opposition party than governing party. When even a GOP stalwart like the Chicago Tribune endorses a Democrat, perhaps even the moderate wings of the Republican party are starting to see that, too. Maybe a rout in 2008 is exactly what the Republican party needs to purge itself of its activist evangelical wing and become a party of limited government again. 2010 could be a pivotal election, particularly if the inevitable restructuring of financial regulation hasn't been finalized by then. |
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| Saturday, October 18, 2008 at 6:28:09 mst
Comment ID: #7
Name: Alfred Centauri
E-mail: alfredcentauri(at)bellsouth.net
"Why disregard the bubbles?"
One should include them if one believes gigantic speculative bubbles are the norm.
"Why compare one time period for the Democrats to a different time period for the Republicans"
Let's compare the growth of $10,000 from 1933 to 1953 for Democratic and Republican administrations and ask ourselves if that is meaningful comparison. |
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| Saturday, October 18, 2008 at 6:45:01 mst
Comment ID: #8
Name: Alfred Centauri
E-mail: alfredcentauri(at)bellsouth.net
"so much for the Republican Party as the defender of the free(er) market."
"However you slice the data, though, it seems pretty clear that government intervention doesn't get any smaller during Republican administrations."
I honestly thought that this was common knowledge by now hence the "move along folks".
"Maybe a rout in 2008 is exactly what the Republican party needs to purge itself of its activist evangelical wing and become a party of limited government again."
Don't get your hopes up. There will be a rout for sure but what message will the Republican Party will take from that? That they weren't interventionist enough?
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| Saturday, October 18, 2008 at 8:07:58 mst
Comment ID: #9
Name: Andrew Dalton
E-mail: andrew.s.dalton(at)gmail.com
URL: http://witchdoctorrepellent.blogspot.com
Alfred:
I had a blog post last week on the topic of what the Republicans might learn from defeat (coincidentally, another "two cheers" title):
http://witchdoctorrepellent.blogspot.com/2008/10/two-cheers-for-rec ...
Certainly, we cannot assume that an election loss will cause the Republicans to learn anything *automatically*. |
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| Saturday, October 18, 2008 at 8:29:59 mst
Comment ID: #10
Name: Diana Hsieh
E-mail: diana(at)dianahsieh.com
URL: http://www.dianahsieh.com/blog
Alfred said: "Don't get your hopes up. There will be a rout for sure but what message will the Republican Party will take from that? That they weren't interventionist enough?"
In part, that depends on what you -- and others -- do. Are you willing to write your local and state GOP party officials -- telling them why they lost your vote? Or perhaps write an LTE or op-ed on the subject? I hope so, because that's what will determine the lesson that the GOP leadership draws from this election.
If Objectivists don't speak up, we can be absolutely sure that our views will be ignored. |
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| Saturday, October 18, 2008 at 8:31:34 mst
Comment ID: #11
Name: Alfred Centauri
E-mail: alfredcentauri(at)bellsouth.net
"Why compare one time period for the Democrats to a different time period for the Republicans ?"
Very well, then.
Growth of $10,000 invested in the 'S&P 500' *only* during Democratic administrations since 1933:
Value in 1933: $10k
Value in 1980: $104k
Value in 1992: $104k
Annualized return from 1933 - 1992: 4% (zero growth from 1981 - 1992)
Annualized return from 1933 - 1980: 5%
'Annualized' return over 32 years of Democratic administration: 7.8%
---
Growth of $10,000 invested in the 'S&P 500' *only* during Republican administrations since 1933:
Value in 1933: $10k
Value in 1953: $10k
Value in 1992: $77.8k
Annualized return from 1933 - 1992: 3.5% (zero growth from 1933 - 1952)
Annualized return from 1953 - 1992: 5.4%
'Annualized' return over 28 years of Republican administration: 7.6%
Which set of the figures above (if any) do you believe represents a reasonable answer to the question of 'is there a significant difference in the growth in the S&P 500 for Democratic administrations and Republican administrations?"
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| Saturday, October 18, 2008 at 10:16:38 mst
Comment ID: #12
Name: Paul Hsieh
E-mail: paul(at)geekpress(dot)com
URL: http://www.geekpress.com
I'd like to elaborate on Diana's comments.
When the Republicans lose (as they should), then they need to be told repeatedly that they lost because they were *too religious*.
Yes, they'll also be told by others that they lost because they were *not religious enough*. And if those are the only voices the Republicans hear, then we'll see more Huckabee-type Republicans in the future, not fewer.
I don't want to see Republicans continuing to outcompete each other in who can be more religious. Instead, I'd rather see them attempting to outcompete each other in seeing who can be pushing for more limited government. I don't expect them to be perfect in this respect, but I'd rather see them moving in the right (rather than the wrong) direction.
Hence here in Colorado, there have been several us who have warned our local and state Republican Party officials *before* the election that they are alienating secular voters who might otherwise support them. We will also be telling them the same thing after the election.
Here are a few examples of what we've written:
http://www.seculargovernment.us/blog/2008/07/gop-platform.shtml
http://www.seculargovernment.us/blog/2008/07/correspondence-with-lo ...
If we want the Republicans to learn the right lesson, then we have to be willing to tell them what that lesson should be. |
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| Saturday, October 18, 2008 at 10:36:17 mst
Comment ID: #13
Name: Alfred Centauri
E-mail: alfredcentauri(at)bellsouth.net
"If we want the Republicans to learn the right lesson, then we have to be willing to tell them what that lesson should be."
Paul and Diana, I'm all for advocating Objectivism via LTEs and communication with our elected officials. At the very least (and perhaps most), it *is* therapeutic.
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| Saturday, October 18, 2008 at 13:36:10 mst
Comment ID: #14
Name: Ed Thompson
E-mail: ethompson55(at)gmail.com
There are many good comments. I’ll add this: Causation precedes correlation.
Bush gets the blame for the mortgage/credit crisis, the largest financial crisis since the Great Depression. However, this fiasco was put into motion by Clinton and a Democratic Congress, while Bush fought (unsuccessfully) to overturn the regulations.
Nixon fought a war, with its concomitant social unrest, that was started by two Democratic presidents and exacerbated by a democratic media.
Hoover didn’t create the Federal Reserve, which created the depression.
Looking forward, the next president will be faced with severe and unsustainable cash flow shortages, not of his own making, but due to Social Security (August 14, 1935 -- Democrat) and Medicare, Parts A, B and C (1965 -- Democrat) and other factors. Indeed, I predict that, if he is a two-term president, there will be extreme governmental financial crisis. Unfunded federal mandates, including these two, total some $60 trillion. Add that to existing public and private debt of $37 trillion for a total of $97 $trillion. That far exceeds total U.S. assets of $50 trillion.
First the Great Depression; next the Obama Nation. |
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