Wilson's second term endured two bear years and two bull years. The
normally bullish election year was horrendously bearish in 1920. The
American public paid the price for allowing the egomaniacal Wilson to
enjoy his final year in office as a lame duck president. Such people
invoke increasing economic damage on their way out of office.
DJIA Index was congruent with presidential
election cycle historical standards with market falling in the post
election year of 1917 as Wilson's continued damage was well underway and
for four more years at that. The market's drop in 1917 may have been an
attempt to predict the short recession that began in mid 1918, but not likely.
One can argue that Wilson was simply bad for economic robustness. This is
noted asynchronous behavior between the stock market and economic
activity in the last century.
Notice the market's drop in 1917 was much
more severe than the short recession that occurred in 1918. Notice how the
market was increasing about six months before the recession. In that case,
the stock market did not do a good job of forecasting the recession, but
there was a bearish spurt from late 1918 through early 1919, where the
short-term blue curve collapsed. There was no bear signal since Force
Vector was rising and the Dow was setting on the bearish yellow curve.
The pre-election of 1919 was, characteristically, bullish, while the
election year of 1920 was uncharacteristically bearish, but
characteristically bearish for a socialist lame-duck as president.
The market's reaction to prohibition helped
promulgate bearish directions that lasted for nearly two years. This
tyranny by the majority democracy and over-zealous political leadership
that tends to tell you how to behave was the beginning of socialistic
causes that eventually led to the great depression. This political
meddling created the mafia economy, where laws and regulations open the money
spigot to underworld distributors who always cater to the demands of the
Woodrow Wilson was one of the worse
presidents of all time.