I have predicted on multiple blogs for about a year that if the DOW was over 10K Bush was reelected.

Of course I did not expect it to happened so soon. Presidential politics is ripe with "what have you done for me latelyism" but still I think it is valid.

And if the Dow gets back to the record of 11,700 the Dem candidate can just pack it in. They have no other issue.

Further...

The internet inspired stock market boom combined with the impending retirement of the boomer generation made far more people watch "monetary politics" than at any time in our history.

George Bush made the strong case that tax cuts would help the economy recover from the Clinton recession and 9/11 downturn. The Democrats said it would not. The Dems took a foolish bet if for no other reason than economic cyclicality.

If the market is over 11,000 and 401K's are not so scary to open, look for Bush to make the STRONG case that he cut taxes and caused that while all the Dems in this crop of dwarfs have pledged to raise taxes.

If that happens.. and it looks like we are watching it... the methodology of cutting taxes to spur growth will be fully understood by the millions of consumers who got 600 or so bucks in checks to spend.

Much to the chagrin of the left.

One single event won't make or break this election for Bush. Remember, there are a lot of people still out of work. What good does a 10k dow do for them?

California is still the big wildcard. If Davis had squeaked out a win, you can almost taste a GOP California in 2024. Whether that taste be sweet or bitter is up to the reader. Sans CA, the dems have no chance. Arnold now has a lot of mistakes *not* to make. He's a political rookie & his mandate wasn't terribly strong. (not narrow, but not strong) He'll be watched closely by CA voters. Too many boffos, too little action and CA goes democratic in CA.

As far as a 10K dow, that depends on where it sits. If it goes to 10.1K then stays stagnant until November, people will get use to it, and Bush doesn't get help. Should the surge continue until spring and then not fall, that helps him. But the market probably won't do that. It's been surging and plunging more dramatically in recent years than in previous years. It could very well peak, then fall, peak & fall, peak & fall. Not many warm & fuzzies for investors.

As far as the Dems not having issues. People are still upset at the lack of policy in post-war Iraq. People are still upset seeing thousands of injuries and daily deaths. Coherent strategy will get Bush out of this, but its still not forthcoming. Don't underestimate this issue.

There are other issues too, but i'll stop there. :)

Just read the 'further' post Paul. I agree with you that people are watching monetary policy. But budget deficits are also big political eggs that people care about. Especially younger families and fiscal conservatives. Dems can still play that card even if the economy starts chugging.

You are right the election won't hinge on a single issue but that (economy) is the only one the Dems have used.

Post war Iraq is not a winner for the Dems. the "daily deaths" as you called them lasted about a month. It is largely over. Despite the media being spinning machines, the post war effort has been extremely successful. Look at the polls that say 71% of the people in Baghdad say they want us there...

The bad press over a U.S. success will only piss the voters off like the LAT did with Arnold.

PLUS it is too far away.. The deaths will be a memory by then. See above on economic cyclicality. They hit that drum too far out.

The great savior of the Democrats is the "3 million jobs lost." If you read the papers close, you will find out that number has been revised down to around 260,000.

AND Bush will get credit for the bad stats... The Dems hit the "3 million jobs" drum for a year. If that goes away it will LOOK like Bush did it even if it is statistics being revised.

You are right Arnold will be a factor. But if the DOW is over 11,700 and we are safe from terrorists.. the election is done.

While I am pretty right wing.. this is not spin.. it is just an accurate observation.

The deficit card has never turned into votes... Voters SAY they care but have never voted to prove it.

Second, compared to GDP is is not a big deal in history.

All things considered, the 401K beats the deficit hands down.

I think I have typed more comments in a briefer amount of time then I ever have before. I'll shuddup now.

Paul