America's Bull Run - US News and World Report
America's Bull RunIt WAS "unexpected" to the MSM and most Americans, but of course both the economy and the demise of the USSR were EXPECTED to one "simple minded" Ronald Reagan. Maybe Reagan wasn't quite as "out of touch" as all those brilliant lefties in the MSM think.
Can we keep it going?
By James Pethokoukis
Posted January 4, 2008
What an amazing run. For a quarter century, from late 1982 through 2007, Americans enjoyed a financial and economic boom that was as powerful as it was unexpected. During that generational span, the economy more than doubled in size—rising from $5.2 trillion to $11.7 trillion, adjusted for inflation—as the stock market generated an incredible 2,300 percent total return. Downturns have been blessedly brief. Consider this: Since 1982, the economy has suffered two recessions, in 1990-91 and in 2001, for a total of 16 months. In the previous 25 years, the economy suffered six economic downturns for a painful total of 67 months.
Wouldn't it be amazing if just a few Americans tried to understand what was different from 1982 on, and WHY we had such an unprecedented run? In 1989 the Japanese Nikkei finished just shy of 39K, and today it sits at around 15k. In the late '80s LOTS of pundits, including Lee Iaccoca, talked of the "foolishness of the Reagan administration", and how the Japanese were buying our country and were going to "take us over". Wouldn't it seem worth understanding why the supposedly brilliant were very wrong and the supposedly foolish were very right?
So what do we do to keep doing what we have done for the last 25 years? Actually it is pretty simple:
- Keep Competition High - No trade barriers, more deregulation.
- Keep Inflation Low - When prices rise, raise interest faster.
- Keep Taxes Low - The Reagan tax cuts ignited the growth in '82 and they and every tax cut since have MORE than paid for themselves with growth in the economy. Of course the government has always figured out how to spend even MORE than that growth, but that is hardly the fault of the growing economy for that. Try to harvest that growth with higher taxes, and every indication is that the growth will stop.
We are hurtling down the road in the economy that Reagan built, and we are likely to hand it over to folks that don't understand anything about what it takes to continue at anything like the current growth we have.