A Small Political Thought....

DNA doesn't have these very often. A political thought which actually makes sense. You see, DNA has read several times now from many sources, that the stock market actually performs better (higher returns) under democrats than it does under republicans, and furthermore, is less volatile. Probably the easiest to read summary is here. Basically, going back over 100 years, the stock market clearly prefers democrats in the white house, even though republican rhetoric is clearly more business and Wall Street friendly. Given this data, when asked why this is, most commentators and economists simply say that it is ironic, or is unusual, or doesn't make sense, but very few actually attempt to explain the phenomenon.

DNA thinks it knows the answer, or at least part of it, and it concluded that this answer is at least partly right because of the overriding refrain we hear about Iraq all the time. This refrain is as follows: The reason why Iraq's economy is terrible, and unemployment is sky-high, and infrastructure is falling apart at the seams, is because of the security situation. In fact, expert after expert says that the number one concern in Iraq is the security situation. Why? Why can't you have economic growth or steady employment, or new infrastructure projects when people do not have security? This is so obvious that no one argues it: In Iraq, because the government can't safeguard the basic need of security for its citizens, its citizens can't do the things they need to do to grow an economy. In other words, all things being equal, SECURITY is most important to the daily life of the Iraqi citizen. No security = no ability to resume normal life.

This is understandable. Security is a universal value, and is as true in Iraq as it is in the US. In fact, security is one of the few needs that take precedence over almost everything:


Safety, number two, only superseded by the most basic of our physiological needs.

This, DNA thinks, helps explain why stocks do better under a democratically controlled government. You see, just like in Iraq, people here need security to function correctly.

If security is necessary to create higher order social structures, then democratic policies, such as regulation to limit unfettered industries(which operate to make a profit, not to safeguard the public), taxation on those who make a shitload, and support of social services which help insure the basic needs of our citizens are met, equate to a more secure population. When we have fewer people concerned about putting food on their tables, or being able to pay for an emergency room visit, we have more people expressing confidence in their economy. If the credit crunch and stock market crash of 2008 has taught us anything, it is that confidence and trust are the most important commodities traded on the exchange.

The most basic function of government is security: security against foreign invaders, security for its citizens who need help, and security from elements within our own country to protect ourselves from ourselves. In the last eight years, we have focused on the first one at the expense of the other two. Most republicans focus on the first one at the expense of the other two. The other two are at least as important, and all three must be attended to or we lose confidence and trust in our government's ability to provide security.