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It's so funny to read debates about things that happened 40 years ago. Why not go even farther and tell us Alger Hiss was innocent? Just look at the Dow since

It's so funny to read debates about things that happened 40 years ago. Why not go even farther and tell us Alger Hiss was innocent? Just look at the Dow since then, and sit down. The stock market is a weighing machine, as Benjamin Graham famously said [1]. Here's how the world's money weighed the two Presidencies: Carter: Starting Value: 959.03 Ending Value: 970.99 Performance While in Office: 1.25% increase Reagan: Starting Value: 950.68 Ending Value: 2,239.11 Performance While in Office: 135.53% increase [1] https://www.goodreads.com/quotes/831517-in-the-short-run-the-market-is-a-voting-machine https://www.goodreads.com/quotes/831517-in-the-short-run-the... [2] https://www.gobankingrates.com/investing/stocks/stock-market-performance-by-president/ https://www.gobankingrates.com/investing/stocks/stock-market...

medvezhenok 5y ago
Looking at the stock market seems like a strange way to grade a president... Calvin Coolidge: Starting (1923): ~90 (Dow Jones Index) Ending (1929): ~320 (Dow Jones Index) Performance in office: 255% increase. What an amazing president - oh, wait...
- UIUC_06 5y ago
  What's your point? Coolidge was in fact a very good president.
  - medvezhenok 5y ago
    My main beef was with using the stock market to grade a president. I was giving the example of Coolidge because the 255% increase was followed by a 90% decrease, which should also be attributed to him (if we're using the stock market) I'm highly skeptical of the "very good president" claim too. "Although the public liked and admired Calvin Coolidge during his tenure, the Great Depression that began in 1929 seriously eroded his reputation and changed public opinion about his policies. Many linked the nation's economic collapse to Coolidge's policy decisions. His failure to aid the depressed agricultural sector seems shortsighted, as nearly five thousand rural banks in the Midwest and South shut their doors in bankruptcy while many thousands of farmers lost their lands. His tax cuts contributed to an uneven distribution of wealth and the overproduction of goods. Many Americans were deeply in debt for having purchased consumer goods on easy installment credit terms." "...Nevertheless, scholarly opinion looks upon the Coolidge presidency with skepticism, ranking him relatively low among American chief executives in terms of his administration's positive impact and legacy." https://millercenter.org/president/coolidge/impact-and-legacy https://millercenter.org/president/coolidge/impact-and-legac...
Kye 5y ago
Reagan and Clinton both got lucky being president during the two major booms of the early Information Age. The introduction of the IBM PC in the early 1980s and the popularization of the internet in the mid-90s caused those numbers. They would have had to mess up big time to not have it happen by pure coincidence while they were in office. Entire new categories of business sprung up by replacing millions of salaries with relatively cheap computers, and by amplifying the productivity of everyone left.
quickthrower2 5y ago
These numbers alone don't tell you much. Problems: * The stock market is not the economy, so you just are weighing how well big corporations that choose to float are doing. E.g. Amazon workers paid next to nothing, and local store goes out of business, and all of this is good for the index. * Adjust for inflation * Adjust for risk tolerance * Adjust for interest rates, and how stocks compete with savings * Adjust for change in what are considered good P/E ratios * Adjust for technological advances * You didn't mention which index To give an extreme silly example to make the point - imagine Amazon was the only stock, you look at the last 10 years, and your currency is Zimbabwe dollars. I would say the stock market is a weighing machine, but what is weighs is complicated. You could double the stock market by printing money, or taxing regular savings at 1% of principal per year.
- UIUC_06 5y ago
  What a silly comment. If the guy you don't like puts up good numbers, those numbers are meaningless? What numbers does Carter have that you like? The Dow (or S&P 500) is the weight of the world's expectations about the US economy, as much as any single number is. No, you cannot "double the stock market by printing money." If that were true, then the Fed's loose money policies during the 70s would have doubled the stock market. They didn't, did they?
  - quickthrower2 5y ago
    I’m purely on the numbers here. No agenda. No guy I like. “Good numbers” - what does that mean? They are numbers for sure. I gave reasons why weight summing market caps might not be a perfect score, can you counter them specifically. I agree printing money might not double the stock market. Are you saying money supply has no affect on stock market? It scares money away from savings and devalues risk. I’m not sure you can pick apart my comment logically.
    - AlbertCory 5y ago
      OK, let's try. First of all, if you don't think that a broad stock market average, for any country at any time, tells us something really important about the country's prospects and overall confidence, then we can probably stop right there. I think it's axiomatically true, but there's certainly no way I can prove it to you As for money supply and the stock market: that too is the subject of many volumes of economics. I happen to think that Milton Friedman was basically right, and he came into his own during the 70s debacle. But if you don't believe that, it's, again, way beyond the scope of a HN thread. Now, as to the "Carter set it all in motion" argument, it reminds me of the movie scene where the guy can't open a window, his son-in-law elbows him aside and opens it, and the first guy yells "I loosened it!" Let's concede, purely for the sake of argument, that Carter had the right ideas. Did he have the political ability to carry them out? Did he have a party behind him? The question answers itself -- he had no ability to persuade anyone of anything, and that's why he lost in a landslide and his VP lost in an even bigger 49-state landslide 4 years later. In politics, being right is not enough -- you have to sell it and you have to finish the job.

medvezhenok 5y ago

Looking at the stock market seems like a strange way to grade a president... Calvin Coolidge: Starting (1923): ~90 (Dow Jones Index) Ending (1929): ~320 (Dow Jones Index) Performance in office: 255% increase. What an amazing president - oh, wait...

UIUC_06 5y ago
What's your point? Coolidge was in fact a very good president.
- medvezhenok 5y ago
  My main beef was with using the stock market to grade a president. I was giving the example of Coolidge because the 255% increase was followed by a 90% decrease, which should also be attributed to him (if we're using the stock market) I'm highly skeptical of the "very good president" claim too. "Although the public liked and admired Calvin Coolidge during his tenure, the Great Depression that began in 1929 seriously eroded his reputation and changed public opinion about his policies. Many linked the nation's economic collapse to Coolidge's policy decisions. His failure to aid the depressed agricultural sector seems shortsighted, as nearly five thousand rural banks in the Midwest and South shut their doors in bankruptcy while many thousands of farmers lost their lands. His tax cuts contributed to an uneven distribution of wealth and the overproduction of goods. Many Americans were deeply in debt for having purchased consumer goods on easy installment credit terms." "...Nevertheless, scholarly opinion looks upon the Coolidge presidency with skepticism, ranking him relatively low among American chief executives in terms of his administration's positive impact and legacy." https://millercenter.org/president/coolidge/impact-and-legacy https://millercenter.org/president/coolidge/impact-and-legac...

Kye 5y ago

Reagan and Clinton both got lucky being president during the two major booms of the early Information Age. The introduction of the IBM PC in the early 1980s and the popularization of the internet in the mid-90s caused those numbers. They would have had to mess up big time to not have it happen by pure coincidence while they were in office. Entire new categories of business sprung up by replacing millions of salaries with relatively cheap computers, and by amplifying the productivity of everyone left.

quickthrower2 5y ago

These numbers alone don't tell you much. Problems: * The stock market is not the economy, so you just are weighing how well big corporations that choose to float are doing. E.g. Amazon workers paid next to nothing, and local store goes out of business, and all of this is good for the index. * Adjust for inflation * Adjust for risk tolerance * Adjust for interest rates, and how stocks compete with savings * Adjust for change in what are considered good P/E ratios * Adjust for technological advances * You didn't mention which index To give an extreme silly example to make the point - imagine Amazon was the only stock, you look at the last 10 years, and your currency is Zimbabwe dollars. I would say the stock market is a weighing machine, but what is weighs is complicated. You could double the stock market by printing money, or taxing regular savings at 1% of principal per year.

UIUC_06 5y ago
What a silly comment. If the guy you don't like puts up good numbers, those numbers are meaningless? What numbers does Carter have that you like? The Dow (or S&P 500) is the weight of the world's expectations about the US economy, as much as any single number is. No, you cannot "double the stock market by printing money." If that were true, then the Fed's loose money policies during the 70s would have doubled the stock market. They didn't, did they?
- quickthrower2 5y ago
  I’m purely on the numbers here. No agenda. No guy I like. “Good numbers” - what does that mean? They are numbers for sure. I gave reasons why weight summing market caps might not be a perfect score, can you counter them specifically. I agree printing money might not double the stock market. Are you saying money supply has no affect on stock market? It scares money away from savings and devalues risk. I’m not sure you can pick apart my comment logically.
  - AlbertCory 5y ago
    OK, let's try. First of all, if you don't think that a broad stock market average, for any country at any time, tells us something really important about the country's prospects and overall confidence, then we can probably stop right there. I think it's axiomatically true, but there's certainly no way I can prove it to you As for money supply and the stock market: that too is the subject of many volumes of economics. I happen to think that Milton Friedman was basically right, and he came into his own during the 70s debacle. But if you don't believe that, it's, again, way beyond the scope of a HN thread. Now, as to the "Carter set it all in motion" argument, it reminds me of the movie scene where the guy can't open a window, his son-in-law elbows him aside and opens it, and the first guy yells "I loosened it!" Let's concede, purely for the sake of argument, that Carter had the right ideas. Did he have the political ability to carry them out? Did he have a party behind him? The question answers itself -- he had no ability to persuade anyone of anything, and that's why he lost in a landslide and his VP lost in an even bigger 49-state landslide 4 years later. In politics, being right is not enough -- you have to sell it and you have to finish the job.