Skip to comments.Interesting One Hundred Year Stock Market Chart (Perspective)
Posted on 09/19/2008 9:49:17 AM PDT by Crimson Elephant
Given the current economic climate and the discussion of the 1930's I thought this easily clickable and manipulated stock chart would be good for perspective. It is one thing to read here and there what the market did over time, but to see it in chart form for a hundred years, or broken into decade segments is a more effective "wow" point.
We aren't even in the remote ballpark by the way.
this is a sidebar: who fires the SEC chair if the President can’t? The Fed? Thanks. Interested to know.
Excellent post and I’ve bookmarked for future use.
I’m thinking that Crimson Elephant is thinking...roll tide?
Interesting how it gets stuck in the 600 - 1000 range from 1965 to 1980, then starts taking off upward. Could the stagnation be from Great Society programs draining the economy and the upsurge be from the economy being let free to grow during the Reagan years?
It kind of flattens out from 1998 - 2001, too. Mmm.. Who’s tax policies were in effect then?
Adjusting the scale that way seems like a good way to tell the story that you want to tell.
That’s a great chart, thanks. Looks like it hasn’t taken more than 4 or 5 years to surpass any one peak since the mid 50’s, but it took almost 30 years to recover fully from the peak before the Depression.
Now here is some perspective! And you are right...we are not even getting close to the ballpark. So much demand for the perfect, undisrupted life that the complaining sounds like we are right around that 1931-1932 period.
Now THAT looks likes a useful chart!
Tax cuts in the 80's have spurred all the current economic growth by allowing businesses to invest and grow and people to have more money to spend. Trickle down works.
Something I saw from another FR post:
The question is not one of the Constitution, but rather one of statute. The creation, composition, and powers of the SEC are found in the Securities Exchange Act of 1934. The commission consists of five members who are appointed by the President with the advice and consent of the Senate. The terms of the commissioners are staggered and the basic length of each term is five years. No more than three of the commissioners may be members of the same political party. The statute does not provide for a chairman. Until 1950, the Chairman was elected annually. Following Reorganization Plan No. 10 of 1950 (see, Reorganization Act of 1949, 5 U.S.C. §§ 901-913), the President designates the chairman. Pursuant to this Reorganization Plan, the chairman succeeded to most of the executive and administrative functions of the commission. S.E.C. v. Blinder, Robinson & Co., Inc., 855 F.2d 677, 681 (10th Cir. 1988).
The Presidents powers with respect to appointment and removal of commissioners from the commission thus differ from the Presidents power with respect to the appointment and removal of one of those commissioners from the office of Chairman. As to the former, The Act does not expressly give to the President the power to remove a commissioner. However, for the purposes of this case, we accept appellants assertions in their brief, that it is commonly understood that the President may remove a commissioner only for inefficiency, neglect of duty or malfeasance in office. Id. Whether the President could remove Cox from the Commision on one of these grounds is debatable, at best, but at least theoretically its possible.
What is not debatable, however, is that The Chairman of the SEC serves as such solely at the pleasure of the President. Harvey L. Pitt & Karen L. Shapiro, Securities Regulation by Enforcement: A Look Ahead at the Next Decade, 7 Yale J. on Reg. 149, 280 n.557 (1990). Indeed, the Tenth Circuit so held in the Blinder, Robinson case cited above. See 855 F.2d at 681, stating that as the President has the power to choose the chairman of the SEC from its commissioners to serve an indefinite term, it follows that the chairman serves at the pleasure of the President.
Hence, when McCain said The Chairman of the SEC serves at the appointment of the President, he was right at the very least insofar as Coxs position as Chairman (as opposed to his position as a commissioner) is concerned.
The graph is logarithmic. You see these commonly with financial and earthquake charts. Ironic? :-)
The only problem is that the Companies that comprise the Dow Jones today are not the same companies that comprised the DJ 20 years ago, or 50 years ago.
Excellent chart, MDT! D’ya happen to have the same chart, but showing the effect of reinvestment of dividends?
Hmmmm...bottom of the channel is around 4,000. I think 7,500 is likely, but we probably won’t go all the way down to 4,000 unless the Fed really screws something up.
Nice plot. It says that a 10,000 DOW would be about average.
However it also says that the DOW could drop as low as 4,000 over the next 30 year period.
Or it could soar as high as 20,000.
Is such a chart available in constant-dollars?
Whoops, see post 9.
Well, under every chart, the last decade sucked. We are basically at no gain, or perhaps even a small loss for the past ten years.
You know, ten years is a big chunk out of one’s prep for future. Assuming you are in the market for forty years, that’s a big chunk. I don’t see how losing a decade can ever be justified as anything but pretty poor.
I’d like to see this chart with the effects of inflation (increase of the money supply) calculated in.
bookmark for later
Clinton did sign the capital gains tax in 1996 or 97. I don’t think it was his idea.
Kind of like Dick Morris telling him he would lose the election if he vetoed the welfare reform act a 3rd time.
Updated your excellent chart to include who was in control of the White House and the Senate. Click on the chart to see full size. Draw your own conclusions.
Well... for starters, as least as regards the relationship between the political party in power and the stock market, I think you have to pretty much discard everything prior to Eisenhower: the economy was so different prior to the Great Depression, and the Great Depression was such a unique event, that comparisons with current conditions are pretty much meaningless.
And once you get into the 1950s and beyond, what those charts say to me is that economic progress has been driven much more by relative international competitive advantage and technical innovation than by political intervention. We have learned a few things: how to better control inflation and shorten and flat in economic downturns, for example, but since about the 1970s we seem to unlearned some others, for example how to operate an economy in such a manner that does not create increasingly uneven income distributions and concentration of wealth and political power.
My own belief has increasingly become that the cost of individual freedom is some degree of restraint in these disparities. Usually this is regarded as a liberal position, but I find it completely consonant with a concern for individual liberty: if you look at the countries with the greatest personal freedom - which I define as least desire to dictate the intimate personal behavior to others as opposed to simply maximizing short-term individual ecconomic opportunity even at the cost of enormous differences in the realization of long-term human ecconomic potentials (for example, the United States actually has relatively low levels of economic mobility compared your parents when compared to most European countries, largely because it educational opportunities there are more evenly distributed) - you tend to find that these are places with - by design - more modest economic disparities than our own.
Of course, if someone is the sort of conservative highly interested in in dictating "correct" behavior to others, or the sort most concerned about absolutely maximizing the individual economic opportunity of the most talented at the cost of everything else, then we are going to disagree.
Okay.. if we look at 1950 and beyond, the most glaring thing to me is the period between 1958 and 1980, when the Democrats had a solid majority in the Senate. The DJIA had a terrible run between 1958 and 1980 and using the inflation adjusted numbers, 1980 ended up being the same valuation as 1910! I know it’s more complicated than that but from a distance, it looks like quite an indictment of a Democrat run Congress.