Obama Has Fixed the Stock Market!

For some reason, I was watching the "lame stream" media the other day.  Some Obama supporter or reporter or whatever you want to call him was talking about how great the stock market is doing under Obama's watch.  He noted how much the stock market was up since the low point that occurred in early 2009 when the Dow Jones Industrial Average slipped to $6,547.05.  On May 31, 2013, the same index was at $15,115.57 for increase of 131%.  Most people would be impressed and say that this is a huge increase in just over 4 years.  This is really a disingenuous take on the stock market though.

Let's go back to 2007 when the stock market hit it's last peak before the great recession of $14,164.53.  When you look at how much ground we've gained in less than 6 years, it is only up 6.7%.  That's not 6.7% per year, but a total increase over the entire period of 6.7%.  The compounded annual growth rate is just a little more than 1%.

You could really take this back even farther.  Let's go back to boom at the end of Bill Clinton's second term in 2000.  The Dow Jones Industrial Average hit $11,722.90 in early 2000.  Since then, the stock market is up a total of 28.9%, which is a compounded annual growth rate of less than 2%.  If you've saved religiously over the long haul and put your faith in the blue chip stocks of the Dow Jones, over the past 13+ years you haven't kept up with inflation.

A lot of us have been saving because we don't expect the politicians to stop the Social Security MessAPolitico.  I personally was saving as though there is no Social Security.  Now, the stock market has failed to make the gains I had expected.  My base of savings that was built up in my first 20 years of employment has only made small gains in the past 13 years.  The only saving grace is that I continued contributing to my 401K plan, and during the past decade the market has spent a lot of time at low levels.  The purchases during those years have grown significantly, because the purchases were made at low prices.  The only unknown is what to expect in my last 10-15 years before retirement.  They are critical in the final tally of retirement savings, and I'm not a bit more confident that Social Security will be around when I retire.

Does the government cause these big increases in the stock market?  Did Obama's bailout programs turn this thing around?  Should he take credit for the big stock market gains in the past couple of years?  I don't think so.  In fact, I believe firmly that the recession would have been a minor correction that would have ended several years ago if the business cycle had been allowed to run its course.  The interventions by the federal MessAPolitico have run up our national debt to unbelievable heights.  The endless regulations designed to protect us all from any harm have instead protected us from employment.  The government can't make good things happen in the economy; that is done by a boom in the private sector.  The best way to have a boom in the private sector is to get the government MessAPolitico OUT OF THE WAY.  The government can't make business boom, but it surely can kill a boom.