According to Obama, the financial system is not good enough. We need to return to the policies of Lyndon Johnson, Richard Nixon, and Jimmy Carter. Those were great years for the financial markets, weren't they?
Were they? In 1964, three months after Lyndon Johnson took office, the Dow Jones scaled the 1,000 level for the first time. By the end of Jimmy Carter's reign, seventeen years later, the Dow Jones was in the 800s. Those were great years for the financial markets? The Johnson-Nixon-Carter years were years of high taxation (on the rich), massive regulation, historic expansion in entitlement programs, massive increases in federal spending, deficits and the national debt. (These are exactly the policies that the Obama administration is pursuing now). Unemployment averaged over seven percent during this seventeen year stretch. Inflation by 1979 exceeded fourteen percent on an annual basis.
Welcome back, Carter.
Obama is eager to return to the stagnation of the 1970s, brought on by: 1) high taxes (on the rich); 2) massive regulation of the financial world; 3) unchecked federal reserve monetary expansion; 4) massive increases in federal deficits and the national debt. These are the policies Obama is now pursuing plus more.
(The latest wrinkle is the Obama initiative to be released on Monday that puts more restrictions on the rights of shareholders to pay management what shareholders think is appropriate. What do the owners of the business (the shareholders) know? Big daddy government knows better, according to our new president. Heck, it worked in Venezuela didn't it? This is the Putin strategy adapted to the American economy).
Meanwhile, how did shareholders fare during the Reagan-Bush-Clinton-Bush years? From a low of 780 on the Dow Jones in August of 1982, the market today, even after one of the worst stock sell offs in history, stands at 7495. Had you invested when Reagan took office, at this point, even at the low in the market, you would have earned 9.1 percent per year! How does that compare to the 17 years of the Johnson-Reagan-Carter years which turned $ 1,000 into $ 800? Which would you prefer?
We know which of these outcomes Obama would prefer. He has said so. Heck, Americans don't need the stock market to provide for them, when they can simply borrow from their grandchildren by running $ 9.3 trillion in new deficit spending (according to the Democratically-controlled Congressional Budget Office).
Welcome back, Carter.