September 13, 2012 8:02 pm

Silence on numbers game doesn’t figure

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It is a puzzle why the Democrats have not been crowing about the market’s rise under Obama

One of my favourite moments at last week’s Democratic convention came when Bill Clinton dared to do arithmetic in public. It was an encouraging development because this year’s US presidential campaign could do with more numbers.

Lest we forget, there was a time when our leaders welcomed an opportunity to display their facility with figures. The founding fathers infamously devised a formula under which each slave counted as three-fifths of a person for representation purposes. The 19th-century political slogan “Fifty-four forty or fight!” was based on a latitude. In 1896 William Jennings Bryan won the Democratic presidential nomination with a call for the free coinage of silver at a ratio to gold of 16 to one.

Sadly, US political numeracy faded over time. Public relations people, to use the polite term, came to play an outsized role and political discourse began to resemble a tepid tone poem. These days politicians of all stripes tend to traffic in hoary focus-group-tested phrases – such as that impregnable Clintonian construct “working families with children” – meant to create the proper mood music for the casual listener.

Mr Clinton’s talk made progress in turning back the clock to a time when the citizens of the republic could stand a serving of specifics. In an address that was longer than it was supposed to be but maintained the public’s attention nonetheless, Mr Clinton added and subtracted, and contrasted and compared, as he ran through numbers on job creation, defence appropriations, student loan rates, health insurance premiums, deficit reduction plans, Medicare costs and tax cuts.

But for my money, even Mr Clinton didn’t go far enough. Like other convention speakers I heard – Democrat or Republican, elected official or empty chair – he failed to mention what could be the biggest number out there for millions of US voters who have been lucky enough to keep working during the current economic downturn.

I’m talking about the level of the stock market. It has gone up – a lot – under Barack Obama after plunging during the tenure of his Republican predecessor, George W. Bush. Think about those figures and it’s easier to understand why so many voters at this point are failing to buy Mitt Romney’s argument – drawn largely from economic data, such as the unemployment rate – that Americans are worse off today than they were when the president was inaugurated on January 20 2009.

Banx illustration

While the Republican reticence on the market is understandable, the Democratic silence is puzzling. I suspect the reason Democrats aren’t talking about stocks is it doesn’t fit their brand. Democrats like to portray themselves as friends of those hard-working little people who have pulled themselves up by their bootstraps and now sit at their kitchen tables worrying about paying the bills – like Bruce Springsteen’s old man. It wouldn’t look right (or left?) for them to boast about fattening up equity portfolios.

But the failure to engage wage earners on this front ignores one of the biggest changes in the lives of American workers in recent decades. Private employers have been phasing out of “defined-benefit” pension plans in favour of “defined-contribution” schemes, such as 401k accounts, which enable employees to put aside money on a tax-deferred basis for their retirements.

I’m part of this 401k generation and I can tell you that since I’ve had my retirement account I’ve become a different person. Left to my own devices, I’m a risk-averse sort. I avoid games of chance and substances proscribed by the authorities; I knock on wood when sportscasters say good things about my teams. But on account of my retirement arrangements, I feel at times like Sky Masterson from Guys and Dolls, rolling dice in a sewer. The bulk of my savings are riding on equities. If things don’t go well, I fear I’ll never retire (luck be a lady!).

Am I better off than I was when Mr Obama took his oath of office? You bet. On the morning of Mr Obama’s inauguration, the S&P 500 index stood at 850.12.

By the time he accepted his nomination for a second term last week, the US benchmark had climbed to 1,432.12. That’s a 68 per cent change I can believe in.

All this could change, of course, in the weeks leading up to the November election. It did in 2008, as many of us remember. But in the meantime, if you are looking to get a sense of how things are going on the campaign trail, be sure to ask someone with a 401k. They’ll tell you the numbers even if the politicians have better things to talk about.

gary.silverman@ft.com

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