Is the Stock Market Jingoistic?
Lawrence Kudlow says so and provides the empirical evidence:
While the Democrats stand against near all of the president’s wartime policies – and in the process court defeat – the stock market is standing with Bush, and the chance for victory. Early last week, when the Democratic leadership of Harry Reid and Nancy Pelosi launched their latest anti-war offensive, stocks dropped about 150 points. Then, in a press conference a few days later, after Bush discussed clear successes in Iraq’s Anbar province, the Dow Jones soared nearly 300 points, marching ever closer to the 14,000-point plateau.
See? Post Hoc Ergo Propter Hoc! Of course, his next line was:
Of course, shares trade on the profit and interest-rate fundamentals of the economy. But if you ask folks on Wall Street what their biggest worry is, most will say another 9/11.
And of course, Kudlow has overwhelming evidence that the Iraq surge will prevent 9/11. Plus he has done a masterful job of modeling the effects on the stock market from the fundamentals versus his 9/11 effect:
Despite the criticism President Bush has received over his Iraq War policies, isn’t it interesting that stock markets have been booming since early 2003, when Saddam was overthrown and the president signed his supply-side tax cuts into law?
It’s a crying shame that the Journal of Finance won’t publish this stuff – which means Kudlow has to put his compelling research on the pages of the National Review.