Bulls At The Gate?(ISSUES & INSIGHTS)(EDITORIALS)

Political Economy: Friday's Microsoft decision and Wednesday's Fed meeting aren't the only new wrinkles that could have a big impact on the stock market. There's also an election coming up.

We'll try to stay as clinical as we can here, looking strictly at facts and realizing that others may have facts of their own that impart a different spin. But we'd be less than honest if we said we haven't noticed a link between the balance of power in Congress and the way the market has behaved.

Still fresh in our memory is what the chart below shows: The minibear market of 1994 bottoming in December, a month after the off-year election in which Republicans regained both houses of Congress for the first time in 40 years.

What followed was a three-year surge that took the S&P 500 up 169% -- the best bull move since 1923. Yes, that move started when the Fed finally stopped tightening interest rates.

But it was also sustained by a burst of thoughtful congressional initiatives that resulted in the first budget surpluses in decades, a major overhaul of welfare and freer ...