According to the statistics it seems so! In an article written by economist Jeremy Siegel (Published 9/5 on Yahoo Finance), it appears that over the last 120 year period stock markets have risen 10.85% under Democratic presidencies, compared to 8.25% under Republican administrations. This trend has only accelerated in the last 60 years, with Democrat returns averaging 15.26% per year versus 9.01% Republican returns. What is it about Democratic presidencies that drive markets nuts?

Everyone who has taken a statistics course (or stayed awake in one, for that matter) knows that correlation does not 100% of the time mean causation. Simply put, stocks going up might have absolutely nothing to do with the presidency. A good example would be to equate the stock market with the number of clouds in the sky. One could collect data that just happens to suggest the cloudier the sky the worse the market. In this dataset, markets and cloud cover are correlated, but no sane person would bet his life savings on the cloud cover.

Consider a more pertinent example: Republican president Herbert Hoover inherited the White House in 1928, just prior to the great crash of ‘29. He came to office at the height of speculative mania which it would be difficult to pin on him. The bubble had to pop at some point, and it just so did during a Republican administration.

Next, consider whether or not Bill Clinton had anything to do with the internet revolution that sparked one of the largest speculative stock bubbles in our time? Did his coming to power (instead of a Republican) have any influence in development and commercialization of the internet? Did he have any personal hand in crafting the democratization of finance that led to a revolution in global capital flows? It’s 99.9% certain that if someone else came to power at that time these events would have occurred nonetheless.

The stock market goes up and down for a number of reasons, but if you try betting on presidential cycles you will likely lose out in the long run. It makes just as much sense as betting on lunar cycles (which it’s sad to say some people do!) and their effects on stocks. Executive policy has an impact on the economy over time, but that relationship to markets is ambiguous and can likely only be evaluated on an individual basis, not categorically as Republican or Democrat. Regardless of party affiliation, it is an axiom of economics that free markets produce greater abundance than centrally-run economies.