Dow Jones Index and Presidents
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:
| President | Years | Percentage Increase |
|---|---|---|
| Warren Harding/Calvin Coolidge | 1921-1929 | 318% |
| Bill Clinton | 1993-2001 | 227% |
| Ronald Reagan | 1981-1989 | 135% |
| Franklin Roosevelt | 1933-1941 | 124% |
| Dwight Eisenhower | 1953-1961 | 120% |
| Harry Truman | 1945-1953 | 82% |
| John Kennedy/Lyndon Johnson | 1961-1969 | 47% |
| Theodore Roosevelt | 1901-1909 | 22% |
| Richard Nixon/Gerald Ford | 1969-1977 | 3% |
| Woodrow Wilson | 1913-1921 | -7% |
| 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.
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Felipe Pait:
The higher the climb, the deepest the fall. Therefore: diversity!
7 February 2009, 7:56 amross:
you forgot to note that bush took the markets to new all time highs after clinton and the banks and greed took it lower and that the downside momentum for the markets started when the media declared obamanation in june07, btw- clintons ‘great performance was on the reagan/bush base which was already in an upswing when clinton took office. i am not bashing clinton,,,,,,,,,,but the last thing america needs is idiots spewing misconseptions.
14 March 2009, 5:35 ammidiplay:
ross claims that the upswing at the time of the 1992 election was due to the outgoing president, but the downswing at the time of the 2008 election was due to the incoming president. He can’t have it both ways.
16 March 2009, 5:38 amCraig:
Great analysis – exactly what I was looking for.
23 August 2012, 12:25 pmOne error — you show JFK as 147% but then when you sort best to worst, you have JFK as 47%
Tanya Khovanova:
Thank you Craig,
147 was a typo, I fixed it.
31 August 2012, 1:11 pmBob Hicks:
Ross, you’re an idiot! You need to stop listening to Limbaugh, Beck, and the rest of the lunatics at Fux. Reagan tripled the debt, raised the debt ceiling eighteen times, robbed social security to try and balance budget. Traded missiles to terrorists. Watch Rand Paul’s video on Jimmy Carter’s budget was better than Reagan’s. Reagan was the beginning of the Grand Oligarch Party’s demolition of the middle class!
4 July 2014, 11:54 amTim Petitjean:
On Jan.20,2017 96.6 %of the DJIA can be credited to Clinton and Obama. It went up a combined 19,155 points during their terms. During the Reagan Bush and Bush terms it increased by 54 points. Historically stocks do much much better when a democrat is president.
24 October 2018, 12:26 pm