I don't usually cover financial issues over here at Basie!, frankly because despite my past enrollment in an introductory Macroeconomics class and my surprising win in the 2001 Oregon Economics Challege I don't know enough about the subject to fairly analyze it. For that matter, most financial pundits don't really know what they're talking about either, so I guess I'm among good company with this post.

There is a common misconception among pundits and the public alike that the markets prefer Republicans to Democrats. The theory would hold that Republicans, more pro-business, will implement policies that will help the economy while Democrats' social policies merely drain from the economy. People even speculated that the market would rally this week because the Republican National Convention is in New York City. Well, it looks like these people were dead wrong.

After the market dipped yesterday, it's not doing so well today. It turns out that Consumer Confidence dramatically fell this month setting off a chain of events that led to the markets shedding points today. I guess the short term market doesn't actually favor the Republicans. How about the long-term market? It must love the GOP, right?

Wrong.

The stock market has performed much better under Democratic Administrations than Republican ones, and every major stock crash this century has occurred under Republican watch. I guess the market doesn't like unbridled capatalism which leads to monopolies, but rather prefers a social net to catch those laid off. By all accounts, then, it must be said that the markets actually favor the Democrats.

While the Consumer Confidence numbers may have been bad for the President, the real interesting numbers will come out on Friday: the Employment statistics. I am not going to try to predict them because most economists are generally off by 100,000-200,000 jobs. Regardless, suffice to say that if the numbers are as poor as the Consumer Confidence numbers today, any bounce the President gets coming out of his convention will be negated (at least on all domestic issues). Accordingly, if you're feeling a little blue about the coverage of the campaign (i.e. you think John Kerry's about to lose 50 states plus DC because that's what the media wants you to think), remember that it can all change in one moment.