As Art used to say, I wasn’t “sentient” when this was happening, but didn’t the stock market decline signficantly in the first 18 months Reagan was in office? It looks to me to be about a 25% decline over that time. Back in that time, did people blame Reagan for the decline or did that blame land on Carter even though much of the fall happend 12 months after Reagan took office?
did people blame Reagan for the decline
Not sure if Pedalsaurus_Tex was around then but my guess is, and I am going way out on a limb here, but he would have blamed Carter.
Perhaps a good point, but IMO two separate issues and two separate times.
In the Reagan years, there was information underload…people were scared to death and had no confidence.
Now, there is information overload…people are scared to death and have no confidence.
There is a difference between being naive and not having confidence and being informed and having no confidence.
Also the great difference in how many individuals personal fortunes/futures are in the market.
Consider, Regan did inherit double digit inflation, interest rates that approached loan sharking levels, and higher unemployment rates. He worked his way through these challenges rather quickly and then led us on to a road of great prosperity. fast forwarding to today, the Messiah Obama, has really inherited a situation that is not as bad. So he should be able to solve this one by just snapping his fingers. You all still think he can walk on water right?
I’m not so sure about the idea of being informed. Sure, we have more information coming at us, but I don’t think most people have any more clue about economics now than they did then. People are still getting away with unbelievable amounts of fraud. Small numbers of groups have the capability of moving certain industries (oil and gas for one).
I think people believe they have more information, but they really don’t.
There is a difference between being naive and not having confidence and being informed and having no confidence.
But also a difference with regards to being ill-informed and having no confidence…which I think reflects the general state of our population at the current time thanks in large part due to our “news-ertainment.”
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Not sure I agree with the 25% decline.
Dow Jan 20th 1981 950.68
Dow March 5th 1981 964.62
An actual 1.4% increase in the same timeframe as Obama has seen a 17% decrease.
Also looks like the low For Reagen was 776.92 on 8/12/82 a year and a half after his inauguration, that’s 18.2%.
That being said the real problem is not the “Drop post election” but the total drop.
In the month of April post his election Reagen saw near record highs in Dow at around 1K and then dropped 18%. Obama came in after an already precipitous drop and the slide continues. We are currently 53% off the highs of Nov/Dec of 07’
By comparison Reagen was back in record territory by Oct of 82’. So from April of 81’ to Oct of 82 the DOW lost 18% and came back. To get something similar we would have to be back at around 14K by May of 09’…I’m guessing that’s nto going to happen.
In short Reagen’s DOW absorbed ALL of the loss and it came back to record numbers and never looked back. Obama’s DOW has only absorbed 32% of the total losses and more than likely won’t get back to record numbers in his administration even if he gets 8 years.
If I remember correctly, and I was barely sentient, mid term of Reagen’s first term there was quite a bit of rumbling about him not getting reelected. Lucky, or maybe not, for him it turned around and came roaring back.
My guess is that if something similar does not happen for Obama he won’t see a second term.
~Matt
Obama, won’t need a second term. he is so full of himself, he’ll probbably propose a plan that makes his position a lifelifime assignemnt. And have us all call him Kng Obama.
That’s why I referred to 18 months in the OP. If Obama is in trouble for 6 weeks of results, what were people saying about Reagan when, 18 months after taking office, the market was down 18-20%?
Good point…I should revise to say “data overload/underload”, not information.
18 months after taking office, the market was down 18-20%?
Like I said, if memory serves, and I was only 12-13 or so, but he wasn’t to popular at that point. People still liked him cause he was very likable, like Obama, but the economy was in the crapper.
Again I don’t think the 18% drop over 12 months is ANYTHING like a 17% drop in 2 months coming at the tail end of a 35% drop over 12 months. People have already been taking a beating for 12+ months and then thing literally collapse. Reagen actually experienced a 1% gain over a couple months right after elected, then a fairly slow drop and very quick recovery.
IMHO, no comparison and yet I believe Reagen got hammered mid term.
There again I don’t think the DOW was Reagen’s biggest enemy. Not nearly as many people had money in the market or looked at the market as they do now. It was jobs, inflation and interest rates. All of which started to see a turn around in Reagen’s first term. Unemployment peaked at about the same time as the DOW hit it’s low and went from 10.8% to 7.2% by election time. Inflation went from 11.8% in Jan 1981 to 4.2% by election time. Keep in mind that inflation was in the 14’s with Carter.
~Matt
“Consider, Regan did inherit double digit inflation…”
**
Regan? What does The Exorcist have to do with this?
“Consider, Regan did inherit double digit inflation…”
**
Regan? What does The Exorcist have to do with this?
I’ll tell ya… After hearing Obama’s plan, for everyone who beleives in free markets, simultaneously they all had their heads whipping around in circles and then began to puke green vomit in unison.
“An actual 1.4% increase in the same timeframe as Obama has seen a 17% decrease.”
Well, look at it this way. Mapping Reagan’s +1.4% into Obama’s -17% for the first six weeks, and assuming that the trends from here on out will continue in the same proportions, and then looking at Reagan’s -25% for 18 months, 18 months of Obama should bring us (if I’ve calculated correctly) a WHOPPING INCREASE of +303.5% in the market! That’ll put us way ahead of the Dow’s highest peak under GWB. ;
Reagan was vilified by the left…he was pounded on day and night just like Bush. I was in college during the Reagen days. The difference is he kept to his conservative principles.
The difference between the two is simple: Obama is following the same policies that Hoover and Roosevelt. He is following a similar recipe that Japan followed. What do they have in common…they all made it worse.
“Henry Morgenthau, a very close friend of Franklin Roosevelt, and his Treasury Secretary, testified before Congress with brutal honesty about the greatest experiment in Keynesian fiscal policy. He said, “We have tried spending money. We are spending more than we have ever spent before and it does not work. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promise. I say after eight years of this administration we have just as much unemployment as when we started… and an enormous debt to boot.””
What we need to do on “tax policy” is what Harding/Coolidge, Kennedy, Reagan and Bush did…CUT THE FREAKING TAX BURDEN AND GET OUT OF THE WAY. In each of these cases, tax revenues increased into the coffers of the govt.
CUT THE FREAKING TAX BURDEN AND GET OUT OF THE WAY. In each of these cases, tax revenues increased into the coffers of the govt.
Reagan’s own financial advisor wrote in a book that the cutting of taxes did not spur the economy. He said the economy actually recovered by simply following its normal cycle and that LESS revenue was brought in with the lower taxes than would have been brought in had the tax policy not changed. In addtion, lets not forget that Reagan raised taxes 4 times after the inital cuts.
Now these guys may or may not have been wrong…I’m just setting the record straight.
Sounds good Viva Obama!
~Matt
He said the economy actually recovered by simply following its normal cycle and that LESS revenue was brought in with the lower taxes than would have been brought in had the tax policy not changed.
Following the same line of though, don’t ya think the “Natural cycle” should have been allowed to play itself out here as well.
I don’t believe we should cut taxes to necessarily “Spur the economy” but because the government spends to much freakin money.
Unlike many in the government and many here believe I don’t think “fiscal policy” should be formed around the idea of “How does the government get more income”. It should be formed around “How do the citizens of the country get more income”
~Matt
I’m not so sure about the idea of being informed. Sure, we have more information coming at us, but I don’t think most people have any more clue about economics now than they did then. People are still getting away with unbelievable amounts of fraud. Small numbers of groups have the capability of moving certain industries (oil and gas for one).
I think people believe they have more information, but they really don’t.
Brilliant! I would go so far as to say as we have been so overwhelmed with information we selectively tune it out because it is so overwhelming. Anyone who thinks they know what is going to happen 2, 5, 10 years from now is just playing the fool. All the prognosticators have has much credibility as Madame Cleo.