Today's guest post is by Peppercommer Matt Purdue
The Tea Party just made our jobs a little easier. But this has nothing to do with their belief that God put coal in the ground for us to burn for fuel, so air pollution and global warming can't really be so bad.
Thanks to the throw-the-bums-out efforts of the Tea Partiers and other Republicans, we now have a divided government. The Dem control the White House and (barely) the Senate, while the GOP runs the House of Representatives.
PR professionals should be dancing in the streets today. Why? Because the stock market loves divided government, especially when the Democrats rule the White House.
According to some sharp analysis published in the Christian Science Monitor, the Dow Jones Industrial Average has historically climbed an astounding 19.5% annually when we have a Democratic president and a Republican majority in at least one house of Congress. Compare that 19.5% to a measly 6.1% annual increase when one party controls the White House and both chambers of Congress.
A soaring Dow usually means a better economy and a stronger PR industry. If companies see their market caps rise, they’re more likely to increase spending on PR and marketing. We could see budgets creep back up to where they were three years ago.
But these aren't usual times. Unemployment and underemployment rates remain very high. The residential real estate market is in a deep trough. And the financial services sector is facing Dodd-Frank, an historic load of new rules and regulations.
All of these factors could continue to drag on the stock market, despite the historical data that points to the contrary. Let's cross our fingers and hope that, at least this time, history repeats itself.