PRESTOPUNDIT -- A Good Blog at a Great Price. Guaranteed.

The Politics of Boom & Bust. "Bull markets tend to occur in the third and fourth years of presidential terms while markets tend to decline in the first and second years. The "making of presidents" is accompanied by an unsubtle manipulation of the economy. Incumbent administrations are duty-bound to retain the reins of power. Subsequently, the "piper must be paid," producing what we have coined the "Post-Presidential Year Syndrome." Most big, bad bear markets began in such years-1929, 1937, 1957, 1969, 1973, 1977 and 1981 .. Some cold hard facts to prove economic manipulation appeared in a book by Edward R. Tufte, Political Control of the Economy. Stimulative fiscal measures designed to increase per capita disposable income providing a sense of well-being to the voting public included: increases in federal budget deficits, government spending and social security benefits; interest rate reductions on government loans; and speed-ups of projected funding. [Example] Federal Spending: During 1962-1973, the average increase was 29% higher in election years than in non-election years .. ". From Stock Trader's Almanac via The Big Picture. Posted by Greg Ransom | TrackBack