The Sunshine Empire

The Dow Jones Industrial Average opened at above 11,000 for the first time since The Great Recession began this morning, and the news seems to have been greeted by conservatives to whom I speak with a collective yawn. A Libertarian friend advised to me that Tea Partiers are not “Wall Street sycophants” and tied to Fed inflated stock returns. This is not untrue, as true Tea Party people are extremely distrustful of the Federal Reserve System. Now putting aside that most economists agree that stock market growth is a leading indicator of strong general economic growth and consider the logic used in the past with regard to the market and President Barack Obama. When Obama took office the stock markets were in a free fall of epic proportions. The radical right and the conservative media echo chamber was awash in armchair economics professors saying that this stock market free fall, in which millions lost large amounts of their retirement savings, was the market itself giving judgment on president Obama’s still nascent economic policies.

Since conservatives blamed the president for the drop, the Dow has increased in value over 5000 points. One would think that using the same logic as conservatives had in early 2009, that this could be viewed as the invisible hand of the market giving it’s blessing to the socialist Kenyan president’s economic policies. But suddenly the stock market’s level is no longer a direct and blatant statement of approval or disapproval of a president’s economic policies. Despite the still bubbling acrimony and resentment about health care reform from conservatives, the 2010 and 2012 elections will hinge on the performance of the economy and nothing more. Republicans can only maximize their gains in the congressional midterms if the perception is the economy is stalling. The pattern is clear after the huge jump in job growth and GDP. Emphasize that TARP was bad, not that the government made $8 billion in profit off the Citigroup deal and is now selling it back off to the private sector. Better to get votes off of death panels instead of having to explain how the economy is growing in spite of the president’s policies.