Mudslinging: A Political Tradition

The question I am getting now is, “What is going to happen with the election?”  Trying to articulate an answer is like tiptoeing through a mine field.  Is there anyone I won’t offend?  It helps that I have a wizard’s hat and a crystal ball in the office.  I take a page from our candidates ‘How to Debate’ handbook and rather than actually answer the question, (which will get me into trouble), I talk about the merits of crystal balls and prognostication in general. A good joke and a little misdirection goes a long way!

However there is economic theory that says the markets can be crystal balls of our economic future. Theoretically Mr. Market1 tries to compute all the information about the local, national, and international economy, politics, and the various companies and economies that are growing, shrinking etc.  People and institutions that are buying and selling use that information as they buy and sell.  These transactions place a value on each individual stock or bond, and the whole of them together establish the value and direction of the markets.   In practice Mr. Market does a mediocre job of prediction.  Paul Samuelson was a Nobel Prize winning economist that famously quipped in a 1966 Newsweek article that the “stock market has forecasted 9 out of the last 5 recessions.”2   CNBC found that 53% of the time a bear market accurately predicts a recession.  Bringing these observations to bear in our current presidential election and knowing the markets are generally up year to date, the theory would hold that Mr. Market is not currently concerned about the outcome on Tuesday November 8.  Personally I am not giving up my crystal ball as neither approach seems reliable.

What I find much more helpful and interesting is our history of 57 previous presidential elections3.  Our first election ran from December 15, 1788 to January 10, 1789 and was conducted under the newly ratified Constitution.  George Washington was unanimously elected for his first term as president running with NO political party and refusing to campaign.  He left the dirty work of campaigning to his political operatives and chief among them was Alexander Hamilton.  George Washington was our last and only non-partisan president.

It is true that our current election is a far cry from George Washington’s where the enormously popular General faced no opposition.  However the current negative rhetoric continues a long tradition of mudslinging starting with the 1800 electoral contest between President John Adams and Vice President Thomas Jefferson.  The dirty work was left to surrogates like the President of Yale, Timothy Dwight, who publically suggested that were Jefferson to become president, “we would see our wives and daughters the victims of legal prostitution.”  Likewise a Connecticut newspaper warned that “Jefferson would create a nation where ‘murder, robbery, rape, adultery and incest will openly be taught and practiced.’”4 James Callender was an influential journalist and supporter of Jefferson who had been imprisoned by the Adams Administration for violating the Sedition Act of 1798.   He wrote that “Adams was a rageful, lying, warmongering fellow; a ‘repulsive pedant’ and ‘gross hypocrite’ who ‘behaved neither like a man nor like a woman but instead possessed a hideous hermaphroditical character.’”Ouch.  Fact checking anyone?

Among the most hotly contested and acrimonious elections was the 1828 election between John Quincy Adams and Andrew Jackson.  Jackson was our first populist candidate not unlike Donald Trump.  Jackson’s supporters called Adams “The Pimp,” procuring young girls for Czar Alexander.  The main charge against Adams was he made a “corrupt bargain” with House Speaker Henry Clay to garner the necessary votes to become president in 1824, given that Clay was later appointed by Adams to be secretary of state.6

Adams’s people labeled “Jackson as a drunkard, a duelist and a cockfighter—and a man who couldn’t spell ‘Europe’ (he spelled it ‘Urope’).  Jackson’s wife, Rachel, was called variously a ‘whore’ and an ‘adulteress,’ because she married Jackson before her divorce was final. Another unkind cut: Rachel was fat.” 7 Our tradition of fat shaming in politics is not something to be proud of.

In our lifetime, the television has produced many memorable negative campaign advertisements. I recommend looking at the old ads on a terrific website called The Living Room Candidate. They have curated the political television ads starting with Dwight Eisenhower. Check it out here: http://www.livingroomcandidate.org/commercials/curator

We know in our hearts that my crystal ball and every other professional seer of our economic future have a dismal record of prediction.  Where to turn for solace?  Our history.  Despite our periodic embarrassment, fear and uncertainty from our system of government and free market capitalism, the end result has been the most successful country and markets in the world.  I expect that story line will continue for some time to come.

~ Mark F. Swingle, CFP (R)

 

  1. “Mr. Market.” Wikipedia. Wikimedia Foundation Inc. 19 Sep16. Web. 10 Oct 16. https://en.wikipedia.org/wiki/Mr._Market
  2. Liesman, Steve. “Can the Markets Predict Recessions? What We Found Out.” CNBC, Feb 4, 2016. Web. 10 Oct. 16.  http://www.cnbc.com/2016/02/04/can-the-markets-predict-recessions-what-we-found-out.html
  3. “United States Presidential Election, 1788-89.” Wikipedia. Wikimedia Foundation Inc. 13 Oct 16. Web. 10 Oct. 16. https://en.wikipedia.org/wiki/United_States_presidential_election,_1788-89
  4. Unger, Rick. “The Dirtiest Presidential Campaign Ever?” Forbes, Aug 20, 2012. Web. 10 Oct. 2016. http://www.forbes.com/sites/rickungar/2012/08/20/the-dirtiest-presidential-campaign-ever-not-even-          close/#4cd2e74a3fea
  5. Ibid
  6. DiBacco, Thomas. “Political Mudslinging, 1828.” The Wall Street Journal, March 1, 2016. Web. 10 Oct. 2016.  http://www.wsj.com/articles/political-mudslinging-1828-1456874832
  7. Ibid

Cartoon source: www.apt2015.alisonstaudinger.com/page/26/

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services or Kestra Advisory Services. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. Any comments that may concern any past performance are not intended to be forward looking and should not be viewed as an indication of future results.  ACR 213705