What the Dow Isn't: Stocks Misused as 'Scorecard' of White House Policy

To hear some in the corporate
media tell it, you judge a president by how the Dow Jones Industrial
Average is performing--and, thus, Barack Obama is not doing a very good
job.

As NBC's Meet the Press host David Gregory said (3/1/09):

MSNBC host Chris Matthews put it earlier (Hardball, 2/23/09):

Some of the commentary was even blunter. NBC's financial pundit Jim Cramer declared on the March 3 Today
show that Obama is pursuing a "radical agenda" that amounts to the
"greatest wealth destruction I've seen by a president." When reporter
Erin Burnett seemed to disagree slightly, Cramer retorted: "The stock
market is the country right now. This is where people's wealth is."

But reporters and commentators are mistaken if they believe the Dow
Jones average amounts to a public referendum on the Obama White House
(or any other White House, for that matter). There is also little
evidence that a rising stock market is necessarily tied to increased
prosperity or broad economic health; it is a measure of what people who
trade stocks think those stocks are worth, i.e. how much they think
other traders would pay for them. As Dean Baker wrote in response to a Washington Post article (3/3/09),
the value of the Dow is not a reliable indicator of much of anything:
"As should be apparent at this point, the stock market can often be
driven by irrational exuberance. Remember, it was almost three times as
high in 2009 dollars back in 2000 as it is today. Did that make sense?"

"It took only 14 trading sessions for the Dow to fall from 8,000 to
less than 7,000," declared Today host Matt Lauer (3/3/09). As pointed
out by Media Matters (3/3/09), MSNBC
anchor Contessa Brewer seemed to more explicitly tie the market average
to Obama: "Since Election Day, the Dow Jones industrial average has
dropped nearly 3,000 points. It's shed a quarter of its value in just
the past two months." The Dow had also lost more than 3,000 points in
the six months prior to Election Day, which might suggest the problems
started long before last November.

And such commentary certainly suggests that the downturn in the market
is some sort of reaction to White House actions--rather than a response
to the routinely downbeat reports from major corporations, indicating
that they will make less money and hence be worth less to investors
than they have in the recent past (and in the case of many major
financial corporations, their balance sheets are worse than downbeat).
As the Washington Post reported (3/5/09):
"The U.S. recession is dragging down almost every industry in almost
every part of the country and businesses do not expect conditions to
improve until late this year at the earliest, according to a Federal
Reserve report released yesterday."

If reporters really want to assess public reaction to White House
economic proposals, there is a much more straightforward way to do
that: public opinion polls.
Those show much more public support for the Obama administration than
is evident among Wall Street investors--or millionaire TV journalists.