Can the performance of U.S. presidents be measured by stock market performance? How has the market performed throughout the tenure of various presidents?
The following representation displays the returns of the S&P 500 during each of the presidential terms for which there were data available.
Please note that the last U.S. president displayed is the incumbent and the data represented is as of today (03/21/2020).
Herbert Hoover, the first president found in the data, saw the index decrease by 77.09% during his tenure. This is because the infamous “Great Depression” began six months after he took office and continued well after he was gone. The causes of this depression are still debated, making it difficult to assign blame with confidence.
Richard Nixon oversaw an index decline of 20.48% and was in office during the start of not just one, but two recessions. These recessions were caused in part by inflation, a decrease in government spending, and the 1973 oil crisis.
Finally, George W. Bush was in office during the “Great Recession”. This recession was caused by loose lending standards leading to a virtual collapse of the U.S. housing market.
Bill Clinton saw the index increase by 209.79% during his tenure. His administration’s economic policy was characterized by a decrease in national debt, budget surpluses, tax reform, and free trade agreements. However, President Clinton also enacted measures which essentially deregulated multiple facets of the finance industry. While these measures may have resulted in short-term economic growth, some suppose that it may have been a contributing factor to the “Great Recession” mentioned before.
As the economy can be dramatically affected by such a wide variety of events (many of which are unforeseeable), it is difficult to judge a presidency solely on the performance of stock market indices. However, presidential administrations certainly have a huge role in anticipating and responding to events which could have harmful effects on the economy as well as encouraging actions which would improve the economy.