Tracking the Slide
Over the past several days, I haven’t been able to shake President Obama’s comments last week that daily “gyrations” in the stock market are akin to fluctuations in daily political tracking polls. It is true that any good financial advisor will urge you to not obsess over daily movement in the stock market, but instead to grit your teeth and look for gains over the longer term. I think Obama’s comment that he was not looking at daily fluctuations in the market, much as he wouldn’t focus on daily changes in political tracking polls, was meant in this spirit.
But the comments have stuck with me uneasily for two reasons. First, while it is true that day-to-day changes in political tracking polls often represent statistical “noise,” rather than substantive changes in support for a candidate, over time they can map out a pretty useful trend line. In the case of the stock market slide, that trend line over the past six months looks like a 90 meter ski jump. Obama’s remarks seemed to imply that the market has been all over the place in recent weeks, when in reality it has been moving steadily downward since last fall, and the daily fluctuations have tracked this in grimly accurate fashion.
Second, anytime a politician says he is not paying attention to newly available data, be it economic or political, I have to smile. Every president in recent memory who has said he does not look at frequent public opinion polls usually turns out to be quite well-versed in them. Obama’s statement had this same sort of “I’m too busy to pay attention” flavor. But we know that an early Obama Administration innovation was to add a daily economic briefing to go along with the one on intelligence the president traditionally receives each morning.  So, I am sure that Larry Summers and his economic team are keeping the president closely abreast of daily changes in the stock market.
In the end, President Obama’s comments were intended to show confidence and ease, and to foster a bit of optimism under difficult circumstances. But in using political tracking polls to talk about the bigger economic picture, I think he actually missed it.

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