Political Cause and Effect
Political Economy
Mike O’Brien
Composition II
Mrs. Kovarik
February 15, 2011
Abstract
Politics and the stock market are at times quite interdependent. On can very easily affect the other; this is usually a negative effect. It has be theorized that the stock market can, single-handedly, change the Presidential approval rating. Dramatic political events also help shape the returns from the stock market. Political parties, political party transitions, and the policies of these parties have a major effect on the returns from the stock market. Many studies have been conducted on the topic of political economy and also many papers have been written about it. Political economy is the study of these simple ideas and many others that are more extensive.
As Bryan Keller (2008) stated in his article Political party power and its affect on U.S. market return, “Few things cloud a person’s objectivity faster than the insertion of politics into a conversation. Simply stated, when political issues and platforms can be boiled down to bumper sticker slogans and backpack patches to bolster support, the absence of perspective and detail greatly detract from one’s ability to objectively analyze the topic at hand” (p. 1). This is a true statement when conversing about any type or category of politics; however, never is it so true as when it is concerning the topic of political economy. This is a rather broad topic and for that reason it is usually pulled apart into different classes. As Harry B. Ellis (1968) writes, in his book entitled Ideals and Ideologies, “The American economy is a gigantic, interlocking mesh of daily, hourly decisions taken by millions of men and women, acting independently of one another, motivated by their knowledge of the business conditions under which they work” (Ellis, p. 172). The basic class of political economy is the effects of politics on the stock market and conversely how the stock market affects politics. There are
Mike O’Brien
Composition II
Mrs. Kovarik
February 15, 2011
Abstract
Politics and the stock market are at times quite interdependent. On can very easily affect the other; this is usually a negative effect. It has be theorized that the stock market can, single-handedly, change the Presidential approval rating. Dramatic political events also help shape the returns from the stock market. Political parties, political party transitions, and the policies of these parties have a major effect on the returns from the stock market. Many studies have been conducted on the topic of political economy and also many papers have been written about it. Political economy is the study of these simple ideas and many others that are more extensive.
As Bryan Keller (2008) stated in his article Political party power and its affect on U.S. market return, “Few things cloud a person’s objectivity faster than the insertion of politics into a conversation. Simply stated, when political issues and platforms can be boiled down to bumper sticker slogans and backpack patches to bolster support, the absence of perspective and detail greatly detract from one’s ability to objectively analyze the topic at hand” (p. 1). This is a true statement when conversing about any type or category of politics; however, never is it so true as when it is concerning the topic of political economy. This is a rather broad topic and for that reason it is usually pulled apart into different classes. As Harry B. Ellis (1968) writes, in his book entitled Ideals and Ideologies, “The American economy is a gigantic, interlocking mesh of daily, hourly decisions taken by millions of men and women, acting independently of one another, motivated by their knowledge of the business conditions under which they work” (Ellis, p. 172). The basic class of political economy is the effects of politics on the stock market and conversely how the stock market affects politics. There are
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