Romney or Obama: Whose Victory Would Ignite an Economic Boom?

Mitt Romney vs. Barack ObamaFor many Americans headed to the polls today, the economy -- and what the next president will do to help or hurt its progress -- is at the forefront of their mind.

According to an exclusive (but unscientific) poll conducted by DailyFinance and The Motley Fool, most respondents were convinced that Romney would be better for the country economically:

Poll results election

When asked "Who will ignite an economic boom?" Mitt Romney nabbed 66% of the votes and President Obama got 34%.

The voting for the question, "Who will doom your portfolio?" followed exactly the same line: 66% of voters chose Obama and 34% chose Romney.

So the majority opinion is clear. But does history back it up? Put another way, do Republican presidents bring the best growth and Democratic candidates bring stagnation?

Surprisingly, no. Not even close.

Baby, You're No Good for Me

Just look at recent years. George W. Bush was about as pro-business a Republican we've ever had in office. Yet stocks dropped 25.1% during his presidency.

He was followed by hardcore Democrat Barack Obama. During his presidency, the stock market has nearly doubled, adding some $7.3 trillion in market cap according to Bloomberg Businessweek as of mid-October.

Similar patterns hold true even going back to 1929. According to The Economist, stock returns for Democratic presidencies have averaged 10.8% versus just 2.7% for Republican presidents.

And it's more than just stock market returns that suffer during Republican presidencies. According to research done by Motley Fool analyst Morgan Housel and economist Robert Shiller, the worst president for stock returns, corporate profit growth, real GDP growth, inflation, and unemployment was a Republican! (Poor ol' Herbert Hoover.)

This seems like a stark contrast to each party's core tenet: Republicans look kindly on unfettered and minimally taxed free-market capitalism, while Democrats insist on higher taxes to pay for more robust government services, and stronger regulations to protect consumers and the environment.

The Illusion of Patterns

Part of the problem is that it's in our human nature to look for -- and find -- patterns, even when there aren't any.

Wilshire Analytics' managing director Bob Waid commented Fortune magazine on why this is the case with election and stock return data to, saying "There's no pattern here -- it's just random. If these were causal relationships, you would see a different pattern."

Another reason for the discrepancy is that a president can only do so much. His progress and blame must be shared with Congress (which sometimes works in opposition to his own goals.)

What's more, a new president typically inherits his predecessor's problems or enjoys the success his predecessor set him up for. Unless a second term is won, most presidents simply aren't in office long enough to see the long-term success or failure of their decisions.

Of course, each president hopes for economic success and stock market gains. And each president has industries they'll try to boost up. Meaning regardless of whether Obama or Romney wins the election, certain stocks in a few key sectors will do quite well.

So don't forget to get out and vote today -- even if we won't enjoy fruits of the winner's labors for another four years.

This article was written by Motley Fool analyst Adam J. Wiederman. Click here to read Adam's free report revealing stocks that could skyrocket after the election results are announced.

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freethedems2012

Read The Harbinger. It ties the current punishment in with the Bible.

November 06 2012 at 10:38 PM Report abuse rate up rate down Reply
mrblockhead22

PRICELESS!!!!!!!!!!...... Elizabeth Warren beats Scott Brown.......Tammy Duckworth beats Joe Walsh........... Claire McCaskill beats Todd Akin........Joe Donnelly beats Richard Mourdock..........PRICELESS!!!!!!!!!!!!!!!!


DEMOCRATS WIN BIG IN THE SENATE!!!!!!!!!!!!!!!!!!

November 06 2012 at 10:29 PM Report abuse rate up rate down Reply
1 reply to mrblockhead22's comment
freethedems2012

It is the punishment of God. Can't you see? He is punishing us for turning away from Him.

November 06 2012 at 10:38 PM Report abuse rate up rate down Reply
1 reply to freethedems2012's comment
mrblockhead22

And God told you this?

November 07 2012 at 12:12 AM Report abuse +1 rate up rate down
mcpogo

Neither will ignite any economic boom. It is out of their hands! The criminals are ruling Wall Street, the country is awash with so much worthless paper money and China has all the jobs. They can yak all they want, there will be no boom!

November 06 2012 at 8:33 PM Report abuse +1 rate up rate down Reply
1 reply to mcpogo's comment
landmlakes

your aso right BO will sell us down the tulb put your head between your legs and kiss your butt good buy , last time you will have anything Gos Help us all the USA is done for

November 07 2012 at 1:33 AM Report abuse +1 rate up rate down Reply
freethedems2012

Boom is the correct word. Don't forget about N. Korea. With a weak president, they will blow us up.

November 06 2012 at 8:10 PM Report abuse rate up rate down Reply
sonn

Sorry ,but the President doesn't control the economy. If you're talking about creating another housing bubble or financial crisis Mitt Romney and the Republicans will try to do that. No Thanks! I lost enough under Bush and his 8 year reign of Stupidness. We don't need more BOOMS that lead to BUSTS!. Slow steady economic growth will put us on the right path which is what we're on right now!

November 06 2012 at 7:18 PM Report abuse -3 rate up rate down Reply
lindacharliebb

poorly written article . we now have a socialist , clinton was no socialist . comparing hoover to romney is absurd.money will be leaving the country quickly if obama gets another term.

November 06 2012 at 6:59 PM Report abuse +2 rate up rate down Reply
1 reply to lindacharliebb's comment
mcpogo

Only the rich 1% money will be...good riddance!

November 06 2012 at 8:35 PM Report abuse rate up rate down Reply
1 reply to mcpogo's comment
freethedems2012

Who will pay your welfare?

November 06 2012 at 8:49 PM Report abuse +2 rate up rate down
tricdicky1

Then why in the hell will anyone vote for Obama??? I guess the people that don't have a portfio and live off the government would...;-}

November 06 2012 at 6:18 PM Report abuse +7 rate up rate down Reply
3 replies to tricdicky1's comment
taxmom

Poorly written article don't look to be a financial analyst in your future!

November 06 2012 at 6:16 PM Report abuse rate up rate down Reply
worried man

If Romney wins then he may cut taxes. More than likely people will spend the extra bucks at restaurants or maybe buy a fuel efficient car. In any case it will only help stores that sell Chinese goods such as ....all of them!
It will not be like the Reagan years when people were still buying American made products and small industries were stimulated and ........ people were not broke to begin with. I predict that there will not be a recovery with Romney. Under Obama we as a country will have to decide what we will do about the many problems we have. Make China buy our goods or else slap tariffs all over their products. You are still buying socks from China which are the same price as US made socks in the store. Profits are up for the stores because the socks cost almost nothing. People are buying less, which is good anyhow. Cuts will have to be made......the roaring 20s are over folks...no more Charleston and Great Gatsbys!!!

November 06 2012 at 6:07 PM Report abuse rate up rate down Reply
freethedems2012

Re-elect me 'cause I'm your friend.
I'll try that Social-ism again.
I'll spend until we're out of debt.
Then I'll spend some more, you bet.
I am just a spending fool.
Vote for me 'cause idiots rule.

November 06 2012 at 5:54 PM Report abuse +2 rate up rate down Reply
1 reply to freethedems2012's comment
worried man

How can you say that about Romney???????

November 06 2012 at 6:08 PM Report abuse rate up rate down Reply
1 reply to worried man's comment
freethedems2012

Obummer is who wants to be re-elected, dopey

November 06 2012 at 8:11 PM Report abuse rate up rate down