Isnt the stock market cyclical?

Question

Is it really Bush's fault the stock market is down or is it a natural pull back?

I don't care for a lot of his policies (and not giving him credit either way) but isn't it normal for this to happen after years of growth?

Answer 1

The short answer:  The stock market and the economy are cyclical.

The stock market represents the trading of many US companies that can function as an indicator of the economy.  Contrary to popular belief, the President can do little to affect the economy, and almost nothing to affect it in the short term.  Any actions undertaken by a presidential administration, would generally take several years to have any effect.  Furthermore, since many, many different factors affect the economy, it is extremely difficult to isolate how presidential policies affected the economy.

In keeping with the theory that economics is cyclical, I would say that the current slump in the market is most likely a correction from the huge periods of growth we had in the late 90s and early 2000.  The dot-com bust, plus 9/11, rising oil prices and the housing correction have all dragged the economy back down.  Hopefully we are about due for an upturn in the market soon.

My Blog -- http://semperfinance.blogspot.com

A Post on the Stock Market -- http://semperfinance.blogspot.com/2008/0...

Answer 2

Yes it is.  The economy is cyclical.  No matter who was President it would have peaks and troughs.