http://www.bloomberg.com/apps/news?pid=20601039&sid=ahtfI4cI65J8&refer=home . . .
The Bush administration ignores the fact that the stock market had stabilized around 10,000 a full year after it took office. Instead, the Bush team insists that its policies should be judged only in comparison with the sub-8000 level in late 2002 and early 2003.
This is consistent with the Bush approach of taking credit for improvements in job growth and deficits: Everything bad that happens has complex, multifaceted causes unrelated to the administration's policies or is a legacy of the preceding Democratic government. But any economic improvement is due to the tax cuts.
Of course, they are highly selective about when such links can be attributed to tax policies. For example, even if you judge from the time the tax cuts went into effect in 2003, the Dow has averaged only 9 percent annualized growth.
That's less than half of the 20 percent annualized gain for the market in the comparable time period following the 1993 budget of Bill Clinton's administration.
Yet, I don't seem to recall many conservative pundits attributing President Clinton's tax policies as the sole or even partial cause of the stock market's dramatic surge of the 1990s. Indeed, think of how Clinton would have been vilified by right- wing pundits had the stock market failed to rise in real terms during such a 4 1/2-year period under his watch.
Most importantly, a 2005 study by the Federal Reserve found that the 2003 tax cuts had nothing to do with the Dow's 25 percent increase that year. The Fed study found that equities unaffected by the tax cuts -- such as real-estate investment trusts and European stock markets -- rose proportionately with the Dow during the weeks in which the tax reductions were announced and passed.
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