I wanted to see how different presidents affected the Dow Jones index. The index was invented at the end of the nineteenth century, so for my convenience, I will start my analysis from the beginning of the twentieth century. I skipped the presidents who were in office for only four years — four years might not be enough to rebuild a bad economy or to destroy a good one. Besides, in order to give the presidents a fair chance, I compared them for the same time period: eight years.
So I removed from my consideration all those who only served for four years: William Howard Taft, Herbert Hoover, Jimmy Carter and George H.W. Bush. I also combined two presidents together, when one succeeded the other mid-term for a total of eight years. Namely, I combined Warren Harding with Calvin Coolidge, John Kennedy with Lyndon Johnson, and Richard Nixon with Gerald Ford. For Franklin Roosevelt, I only considered the first eight years of his presidency.
Please note that it was not always precisely eight years — the inauguration date was sometimes moved. So Theodore Roosevelt and Harry Truman had slightly less than eight years. I tried to use the Dow Jones index from the exact day of each inauguration, but not all the dates were available in the file I used. So sometimes I had to pick the previous day.
|President||Time||Starting DJI||Ending DJI||Percentage Increase|
|Theodore Roosevelt||Sep 14, 1901 — Mar 4, 1909||67.25||81.79||22%|
|Woodrow Wilson||Mar 4, 1913 — Mar 4, 1921||80.71||75.11||-7%|
|Warren Harding/Calvin Coolidge||Mar 4, 1921 — Mar 4, 1929||75.11||313.86||318%|
|Franklin Roosevelt||Mar 4, 1933 — Mar 4, 1941||53.84||120.88||124%|
|Harry Truman||Apr 12, 1945 — Jan 20, 1953||158.48||288.00||82%|
|Dwight Eisenhower||Jan 20, 1953 — Jan 20, 1961||288.00||634.37||120%|
|John Kennedy/Lyndon Johnson||Jan 20, 1961 — Jan 20, 1969||634.37||931.25||47%|
|Richard Nixon/Gerald Ford||Jan 20, 1969 — Jan 20, 1977||931.25||959.03||3%|
|Ronald Reagan||Jan 20, 1981 — Jan 20, 1989||950.68||2235.36||135%|
|Bill Clinton||Jan 20, 1993 — Jan 20, 2001||3241.96||10587.59||227%|
|George W. Bush||Jan 20, 2001 — Jan 20, 2009||10587.59||7949.09||-25%|
Some might argue that I need to scale the Dow Jones Index. For example, the inflation rate was very different for different presidents. It is generally accepted that the value of one point in the Dow Jones Index decreases with time, but inflation is only one of many elements contributing to that change. Nonetheless, I took a look at that and the resulting picture didn’t change much anyway when I adjusted for inflation.
The Dow Jones is just one number. An increase in the Dow Jones does not completely describe the state of the economy, but it is certainly an interesting measure in its own right.
Let’s look at how the presidents and the presidential teams performed, sorting them from best to worst:
|Warren Harding/Calvin Coolidge||1921-1929||318%|
|John Kennedy/Lyndon Johnson||1961-1969||47%|
|Richard Nixon/Gerald Ford||1969-1977||3%|
|George W. Bush||2001-2009||-25%|
When I started this calculation I expected Clinton to be doing well and Bush badly, I just didn’t know exactly how good/bad they were. But the most interesting result of this exercise is the fact that the highest increase in DJI happened right before the Great Depression.
What can I say? I should have done this analysis eight years ago. Maybe the proximity of Clinton’s performance to the pre-depression boom could have urged me to move my 401(k) from stocks. Sigh.Share: