|This essay by Mark Galasiewski originally appeared in
The Elliott Wave Theorist in April 2007.
Ever since 1985, when “Popular Culture and the Stock Market” observed, “Feminism gains power during corrections,” The Elliott Wave Theorist has noted that female power waxes in periods of negative social mood. Recently in the political realm, Nancy Pelosi’s ascension to Speaker of the House of Representatives, as well as Hillary Clinton’s current lead in the Democratic Party’s 2008 presidential nominee race, have again brought the issue to the fore.
Currently Pelosi, as Speaker of the House, second in the line of presidential succession after the Vice President, is the highest-ranking woman office-holder in the history of the United States. Those who wish to see Clinton become president should understand that her chances will improve with a stock market decline before the Democratic primary and the election. Under such a scenario, her status as a non-incumbent party candidate and as a female would probably ensure victory.
Why? Pioneering Studies In Socionomics showed that incumbent party presidential candidates are more likely to be ousted during bear markets. At such times, voters are more likely to blame the current office-holder for the dour national mood and are more willing to give challenger party candidates a chance.
In addition, the accompanying chart shows that the first woman in every major U.S. political office made her breakthrough near the end of a major bear market. Pelosi’s real victory came just one month after the stock market bottom in 2002, when the Democratic Party elected her House Minority Leader. This position defaulted to Speaker when the Democrats gained a majority in Congress in January 2007.
Since some of the examples on the chart above follow war periods, it’s tempting to assume that during wartime women expand their authority in men’s absence. But the 1932-33 and 2002 examples negate this hypothesis. A more likely explanation is that women benefit from the general call for change that attends bear market periods. Since men are traditionally both the source and the symbols of power during booms, their authority is frequently stripped in the creative destruction that inevitably follows. In their place can arise non-traditional candidates, a group which has historically included women.
A notable example of this phenomenon is Margaret Thatcher, who was elected prime minister of the United Kingdom in 1979 as that country was emerging from the bear market of the 1970s. Viewed thereafter as a bull market leader like her U.S. counterparts Ronald Reagan and George H.W. Bush, she faced considerable opposition within her own party during the bear market of 1990. Two months after the Financial Times Stock Exchange Index bottomed that year, she resigned as head of Britain’s ruling party.■
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Most economists, historians and sociologists
presume that events determine society’s mood. But socionomics hypothesizes
the opposite: that social mood determines the character of social events. The
events of history—such as investment booms and busts, political events,
macroeconomic trends and even peace and war—are the products of a naturally
occurring pattern of social-mood fluctuation. Such events, therefore, are not
randomly distributed, as is commonly believed, but are in fact probabilistically
predictable. Socionomics also posits that the stock market is the best available
meter of a society’s aggregate mood, that news is irrelevant to social
mood, and that financial and economic decision-making are fundamentally different
in that financial decisions are motivated by the herding impulse while economic
choices are guided by supply and demand. For more information about socionomic
theory, see (1) the text, The
Wave Principle of Human Social Behavior © 1999, by Robert Prechter;
(2) the introductory documentary History's
Hidden Engine; (3) the video Toward
a New Science of Social Prediction, Prechter’s 2004 speech before
the London School of Economics in which he presents evidence to support his
socionomic hypothesis; and (4) the Socionomics Institute’s website, www.socionomics.net.
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