Sean Hannity and Rush Limbaugh continue to suggest that President-elect Barack Obama is to blame for the decline in the stock market, referring to the state of the stock market as an "Obama recession." In fact, analysts have refuted the proposition that the market decline has anything to do with anticipation of Obama's presidency.
On the November 11 broadcast of his nationally syndicated radio program, Sean Hannity again suggested that President-elect Barack Obama is to blame for the decline in the stock market and said of Wall Street's performance: "Wall Street keeps sinking. Could it be the Obama recession: The fear that taxes are gonna go up, forcing people to pull out of the market?" Hannity is not alone among conservatives in the media in referring to an "Obama recession" in purported explanation for the state of the stock market. As MSNBC's Chris Matthews noted on November 12, radio host Rush Limbaugh "says the recession isn't President Bush's fault. It's the fault, catch this, of the president who hasn't yet taken office. It's an 'Obama recession'; that's what he's calling it." Matthews characterized Limbaugh's reference to an "Obama recession" as "some of the bitter sore loser's rhetoric we are hearing from the right these days."
Limbaugh referred to an "Obama recession" on the November 6 and November 11 broadcasts of his nationally syndicated radio show. But as Media Matters for America has noted, analysts have refuted the proposition that the market decline is attributable to Obama's election, citing other factors such as weak economic data.
For instance, a post on The Wall Street Journal's MarketBeat blog stated that "[f]ollowing the brief pre-election euphoria that brought stocks up 17% in a six-day period, stocks have been sluggish since as investors focused, once again, on the lame economic data and the drumbeat of bailouts, potential bailouts, and worries about other bailouts." From a November 12 item on MarketBeat:
The market has contracted an ongoing case of the "blahs." Following the brief pre-election euphoria that brought stocks up 17% in a six-day period, stocks have been sluggish since as investors focused, once again, on the lame economic data and the drumbeat of bailouts, potential bailouts, and worries about other bailouts.
"The market is kind of wallowing and just kind of staying in a downtrend right now," says Stephen Carl, head trader, Williams Capital. "The market is not keen on anything at the moment."
Again, stocks were lower. The Dow industrials lost nearly 2%, and other major averages were performing about as well after another spate of sour news from America's corporations.
"The weakness being witnessed at the start of today's session can be accounted for by the negative investor sentiment surrounding the still unfolding economic crisis," writes Conley Turner and Brian Sozzi, research analysts at Wall Street Strategies. "The market is in uncharted territory, and is navigating a path that requires the skill set of the early world explorers...the news flow so far, albeit slow, is not providing any solace to market participants."
One problem may be that U.S. stocks, in a sense, are no more attractive now than they were at the beginning of the year. According to Bespoke Investment Group, the U.S. price-to-earnings ratio sits at 20.54, compared with 20.11 at the beginning of 2008. Usually, P/E ratios decline in bear markets, but as earnings have fallen faster than prices, the U.S. P/E has expanded.
Additionally, as Media Matters documented, in the days immediately following the November 4 election, several analysts on Fox News and Fox Business Network cited reasons independent of the election to explain the fall of the market, explicitly stating that they did not believe the market was reacting to Obama.
From the November 12 edition of MSNBC's Hardball with Chris Matthews:
MATTHEWS: Also, baseball, hot dogs, apple pie and Chevrolet: Is there anything that says America to the world, or used to, more than the American auto industry? Democrats are now urging emergency help for an industry in desperate trouble, while President Bush is cool to the idea. Should the blame for this destruction of our industry go to the politicians for refusing to modernize Motown all these years? Should the auto industry be forced to make it on its own now, or is it just too big and important in jobs to be allowed to die? We'll ask author and New York Times columnist Tom Friedman, he's coming on Hardball tonight. Plus, Rush Limbaugh says -- and sometimes I agree with him; not this time -- he says the recession isn't President Bush's fault, it's the fault, catch this, of the president who hasn't yet taken office, Barack Obama. It's an "Obama recession"; that's what he's calling it. That's just some of the bitter sore loser's rhetoric we're hearing from the right these days. Later on -- later on that -- we'll have more on that. Also, what are President Bush's greatest regrets as his presidency comes to a close? We'll have that, the 11th-hour confessions, and he's making a true confession right now on tonight's "Politics Fix."
From the November 6 edition of Premiere Radio Networks' The Rush Limbaugh Show:
LIMBAUGH: Now, Carl Cameron did a report on Fox last night. He was on The O'Reilly Factor, and he's now been everywhere on Fox because people have been leaking to him. But it's not just -- it's not just Fox and Carl Cameron. Newsweek -- Newsweek has a special project they call -- on Sarah Palin, the purpose of which is to destroy Sarah Palin and, of course, establish the anointed one.
Speaking of Obama, by the way, the Obama recession is in full swing, ladies and gentlemen. Stocks are dying, which is a precursor of things to come. This is an Obama recession. Might turn into a depression. It's -- he hadn't done anything yet, but his ideas are killing the economy. His ideas are killing Wall Street. They need some certainty. And now everybody in the drive-bys -- we don't know who Obama is. We've got a story from Jennifer Loven at the Associated Press today -- we don't know who Obama is. All of a sudden now on Charlie Rose, they're starting to talk about his ties to Saul Alinsky.
From the November 11 edition of The Rush Limbaugh Show:
LIMBAUGH: I just -- you know, I remember when the focus in this country used to be on the private sector. In the good old days, what was good for GM was good for America. Now we're told what's good according to the Treasury secretary is good for America. The singular focus on Washington is the problem. Everybody -- you know, the market down 267 again. The Obama recession continues.
And why is this happening? Because there's no stability. The markets are frozen waiting for Paulson to say something. The Treasury secretary has all the power here. The markets are frozen because they really don't know how fast Obama is going to embark on his own destruction of the U.S. economy via his tax increases.
There is so much government interference. There is so much government control. There is no incentive to plan for next week if you're one of these businesses, unless you're desperately trying to stay alive by asking the government for a bailout. Then you're trying to get it next week. But there is no incentive to plan for much -- you know, next five years out.
From the November 11 broadcast of ABC Radio Networks' The Sean Hannity Show:
HANNITY: By the way, Donald Trump was right. He was saying that he expects oil to tumble. He even said it may go as low as $20 a barrel. He said this when it was 140. Now, it's under $55 a barrel. Well -- and by the way, Wall Street keeps sinking. Could it be the Obama recession: the fear that taxes are gonna go up, forcing people to pull out of the market? All right, let's get to our phones here, as promised. Let's go to Ann in Rahway, New Jersey. Ann, long time no -- no hear. How are you? Welcome to the show.