For several years I have had occasion to chat with the individual who manages my parents' investments at a major stock brokerage. We have always gotten along very well, and have had far ranging conversations on many subjects, including the state of the country, the world, and the economy. One subject we dance around very gingerly is politics. Yet recently, she was bemoaning how the economy is a disaster right now, and confessed to be in despair for the first time in her life about the direction of the country. She added that her despair was made worse by the two "idiots" (or some word to that effect) currently running for president. After confirming that she was in fact referring to McCain and Obama, I asked point blank who she thought would be better. Not to my surprise, she answered "Giuliani or Romney." I bit my tongue and quickly changed the subject.
As I say, her reply did not surprise me. Not only because she had insinuated her Republican leanings to me in the past, but also because of where she worked -- in the bowels of the Wall Street Beast, West Coast branch office. It seems to be an article of faith on Wall Street that the stock market -- and with it, the economy -- will do better under the Republicans rather than the dreaded Democrats.
This attitude has pretty well become conventional wisdom in the general public as well. That conventional wisdom holds that the Democrats, as members of the "mommy party," spend all their time and energy worrying about the poor, the disadvantaged, the immigrants, and the victims of society, and whipping up useless government programs to spend our hard-earned tax dollars on various bleeding-heart projects to alleviate the suffering (real or imagined) of these groups. Republicans, on the other hand, as the "daddy party," are concerned with the big important issues, like national security and the economy, and understand the "real world" much better. In this view, Republicans are too savvy to waste tax dollars on liberal do-gooder projects, because they know that the free, unregulated market does an infinitely better job of running the economy for everybody. A rising tide lifts all boats, they say, and if we just let it do its thing, the free market will take care of all our problems. Right? Well, that's the theory, and the so-called Liberal Media has basically bought it hook, line and sinker. This has been true at least since Reagan taught us all that "Government is not the solution to our problem; Government is the problem."
There's only one difficulty with the theory: it's wrong. To quote a different President: "Facts are stubborn things." As the historical facts stubbornly show by every objective standard and in every relevant category -- inflation, gross domestic product, national debt, economic growth, government spending, employment and job creation -- Democrats have consistently done better for the economy than Republicans. The superiority of Democratic economic stewardship extends to every level of society except one -- the very wealthiest. The evidence shows that under Democratic administrations, every income group, from the poorest to the richest, experience improvement and economic growth. By contrast, under Republican administrations, not only is the overall economic performance inferior, but only the very wealthiest individuals fare better; all other income groups do worse under Republicans than they do during Democratic administrations. (See, for example, here, here, and here.)
Why is this? Well, it seems the best explanation is that in their economic policy decisions, Republicans are so obsessed with cutting taxes for the wealthy and making life easier for large corporations, that their policies are of only limited benefit to the rest of the country. In other words, because their focus is on the wealthiest 5%, the other 95% of the country does better under Democrats.
And that's also the explanation for why Wall Street and the Pooh Bahs of the so-called Liberal Media have swallowed the false conventional wisdom about Republicans being better for the economy. Nowadays, those TV anchors and talking heads are members of the top 5%, just like the stock brokers and financial analysts who all pray for the nomination and election of someone like Giuliani or Romney. I surmise that these people are so out of touch with the great mass of the country, they actually don't realize that the rest of us are doing so very much worse under Republican stewardship. As far as they're concerned, life couldn't be better; just refresh my martini and keep those tax cuts coming, please.