Democratic presidential frontrunner Hillary Clinton believes that Democratic leadership in the White House leads to a more successful stock market, according to recent comments she made at a campaign stop in New Hampshire.
“You know the evidence is pretty clear that under Democratic presidents, going a ways back, people do better,” she said. “And not only working people, middle class people. Even the stock market does better when you have a Democratic president in the White House.”
While the majority of statistics showcase that Democratic presidents in the past have had a more balanced economy and less volatility in the stock market, there are many different scenarios in each presidential administration that have allowed the commanders-in-chief to either lose credibility or pick up the pieces of a weakened economy.
For example, former Republican president Herbert Hoover presided over the early days of the Great Depression in the fall of 1929 and was not able to rehabilitate the economy largely enough before Democrat Franklin D. Roosevelt was elected in November 1932. The creation of government entitlement programs, such as Medicare, combined with the economic boom from World War II allowed Roosevelt to succeed during one of the nation’s toughest economic times.
Another example occurred during the administration of Democratic president Bill Clinton. Due to the evolution of technology and the usage of the internet to create business and sell products, the stock market saw some of its highest numbers during the late 1990’s and early 2000’s. However, the “dot-com” bubble burst upon the election of Republican president George W. Bush in January 2001; combined with the terror attacks in New York City on September 11, the Bush administration was faced with several economic setbacks that were not in their control.
Sam Stovall, chief investment strategist at S&P Equity Research, studied the economy from 1901 to July 31, 2015 to see how the markets fared when a member of the Democratic or Republican Party was in charge. According to his research, Stovall found that the stock market gained 8.7 percent under Democratic presidents, while only 5.3 percent under GOP leaders. Once again, the economy and the market varies from administration to administration and is difficult to give one party a label based on these numbers.