THERE ARE FAR MORE IMPORTANT MEASUREMENTS…. The day after President Obama addressed a joint session of Congress in February, the Dow Jones was down about 2% by mid-day. Drudge, hoping to assign blame to the president, ran a headline: “Was it something he said?” A couple of hours later, the Dow had rallied, so Drudge changed the headline: “Stocks rebound.” And an hour later, the Dow had gone back down again, causing Drudge to change the headline back to the original Obama-blaming message.

Putting aside what this tells us about Drudge’s “standards,” this was another reminder of the over-emphasis on Wall Street watching in the political world.

There’s a perception that the markets are akin to focus-group dials. If the White House’s economic agenda is sound and effective, investors will feel confident and the indexes will rise. If Obama is headed in the wrong direction, the markets will drop. This is especially true of the Dow Jones because, well, news outlets say so.

Jon Stewart said last week that some of us may be tempted to ask, “Isn’t the Dow Jones Industrial Average just a short twitch numerical representation of a bunch of guesses about other people’s assumptions about the financial well-being of an arbitrarily chosen group of 30 out of tens of thousands of possible companies?” He explained that we’d be wrong to ask, though, because the Dow is actually “a real time, cause and effect precision barometer of how the president is doing.”

He was kidding, of course, but his joke accurately reflects a little too much of recent political reporting.

With this in mind, Jonathan Chait had a very good piece last week on conservative pundits and mainstream outlets blaming the bear market on the administration. The entire argument, Chait explained, is “unbelievably fatuous.”

The larger fallacy here is to assume that the stock market is a proxy for the entire economy. Many people realize that the stock market is an imperfect gauge. But it’s not just an imperfect gauge of the economy-it doesn’t even attempt to measure the economy. Stock prices represent the market’s guess at the profitability of corporations. While that’s related to the health of the overall economy, it’s not the same thing, and sometimes the two diverge sharply. During the Bush administration, for instance, corporate profits soared while wages for most families flatlined. […]

The stock market has become the media’s real-time economic report card. Economic statistics that actually measure broader material well-being come out once a month, some once a year, others once a decade. The stock market updates instantly, making it irresistible.

But resist we must. Stock prices go up and down for all kinds of reasons, but Wall Street is the wrong metric anyway. Obama is focused on job creation and economic growth, not the unpredictable fluctuations of 30 individual companies.

When the economy is in bad shape, the markets tend to go down. But the indexes are not the economy, and looking at the markets as some kind of financial approval rating for the president is foolish.

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Steve Benen

Follow Steve on Twitter @stevebenen. Steve Benen is a producer at MSNBC's The Rachel Maddow Show. He was the principal contributor to the Washington Monthly's Political Animal blog from August 2008 until January 2012.