It's funny that you bring that up, because that was a regular discussion with co-workers when I lived in Portland. Generally, it's a classic invest/profitkeeping boom and bust, over and over. Democratic Presidents tend to encourage conditions that make people want to pull their money out from underneath the bed and put it to some kind of use. When, for instance, you're looking at a labor shortage in particular skills, employers start rounds of investment in order to offset the increased cost of skilled labor. This was why, back around 1998, the Wall Street Journal was incessantly kvetching about how the unemployment rate was too low. While that sounded great to general workers, it made big CEOs nervous, because the usual "the floggings will continue until morale improves" policies meant that replacing the people leaving would cost even more.

Meanwhile, under Republican Presidents, you tend to see policies that encourage investors and companies to stop investing elsewhere and take their profits for a time. Problem is, this is usually such a rapid profit taking that it tends to drive the country into recession. It's usually a great time for capital gains tax reductions and less of a push for an increase on the minimum wage, so employers can get more from workers with the vague threat of how "it's really bad out there in the job market." (I've worked for several employers who honestly looked surprised when their constant threats were met by employees taking jobs elsewhere: didn't they know how bad things were out there?)

Now here's where the discussion came in, from both sides of the political spectrum. We all agreed that a saner, more stable system would ease a lot of the boom/bust cycle, with more forethought about future effects. The problem, we all agreed, was that political polarization had become so bad in the Nineties that either party getting power took at it as a sign to go nuts and demand everything they could get. After all, the likelihood was good that subsequent power shifts would strip out more moderate policies, so why not act like a sorority girl with Daddy's AmEx and grab everything you can? (And yes, I'm saying that far too many politicians are suffering from arrested development. I'm starting to think, these days, that it's a prerequisite for holding office, because it's obvious how few want to have to be the grown-ups and let all sides in a discussion know that we're having Brussels sprouts for dinner whether they like it or not.)

Reagan didn't do bad, since Carter was such an abysmal failuer he couldn't have done worse.

Clinton basically worked with gridlock which is what I think Wall Street liked. Bush never said no to any spending proposals so that wasn't a gridlock situation. Obama, like Reagan, caught the market in a re-bound.

I'm reminded of the slogan, often attributed to Harry Truman, "If you want to live like a Republican, vote for a Democrat."

"Why is that?"

That question requires a very complex, detailed answer, way beyond my capabilities or attention span, especially without my morning cuppa-joe.

Instead of my feeble attempt, I will read other people's responses that basically mirror their political leanings, as evidenced by the postings above this one, and those that will soon follow.

Two words: Handouts and subsidies.

Oregbear has it right.

Why, because the Republicans are more fair. Their philosophy - generally favors opportunity for all - not always, but generally favors infrastructure, and public safety initiatives that favor everybody. For instance mass transit, favors few - and denies opportunity, and roads favor many and increases individual opportunity.

Expectations: everyone thinks the R in office is going to lead to unbridled capitalism. When it doesn't happen, results are disappointing. When D is elected and in office, everyone thinks we're turning socialist. When that doesn't happen, people are pleasantly surprised.

There are two major trends in the data that don't have a lot to do with particular presidents -- the Greenspan bubble that eventually went bust and the Bernanke bubble that continues to expand. As Jim Cramer on CNBC says "Don't bet against the Fed."

Long-term trends in in large cap stocks are more of a function of monetary policy and credit conditions than anything else. Loose monetary policy and easy credit drive up equity prices and make equity returns more attractive relative to debt. Note the 50 percent increase in equity prices under Obama bears almost no relationship to the (anemic) economic growth that has occured. It bears a very strong relationship to the trillions of dollars that Bernanke has taken on to the Fed's balance sheet.

What Kent said.

Good answers here to an interesting question. Lots of external factors, too, that are only tangentially related to the Prez. Like the fall of soviet block, the rise of China, outsourcing leading to big profits, and, underlying all of the above, international growth for big corporations.

A simplistic analysis by simplistic people. To add some nuance to the argument, they should note that the economy does best under divided government. The implied stability in limiting each party's ability to run the economy off the rails is what allows for lasting growth, rather than short spurts (which are naively tied to political cycles).