Weakest stock market rally ever

Weakest stock market rally ever

Despite stubbornly high unemployment, one supposed highlight of the Obama recovery is the booming stock market. Actually, it’s one of the weakest bull markets on record. Here’s a graph from Chart of the Day showing what has happened.

Stock market historical, chart of the day, July 17, 2013

As you can see, the greatest rally ever began in 1942. The chart doesn’t show it, but the rally began after the great Battle of Midway that June. It was only six months after Pearl Harbor. Three American aircraft carriers faced off against four carriers of the Imperial Japanese Navy. We lost one, they lost all four.

America’s industrial capacity was 10 times that of Imperial Japan, so there never was any doubt we would win. But the U.S. command had to decide how much of the war effort to devote to fighting Japan, and how much to defeating Nazi Germany. The Midway victory insured that the plan to devote 3/4 to Germany, 1/4 to Japan would continue. Meaning first the more powerful Germany would be crushed, then Japan. Which meant the war would be won earlier than if more had to be devoted to Japan.

In 1942, President Roosevelt also agreed to lessen his New Deal assault on businesses to allow them to become the Arsenal of Democracy, which is what happened. As they said at the time, he went from being “Dr. New Deal” to “Dr. Win the War.” Most of the New Deal was junked, something that continued after the war, when prosperity roared ahead in 1946, especially after taxes were cut that year. That is, despite many wartime controls, in 1942 capitalism was unleashed.

In the chart, the next strongest rally began in 1987, after President Reagan’s 1986 tax cuts. And the third strongest rally was in 1921, after President Harding restored America to post-war “normalcy,” as he called it, by cutting taxes.

The message is clear: Freeing businesses to make profits generates prosperity, not just for businesses and markets, but for everybody.

By contrast, the current “recovery” occurs amid massive recent new regulations, including Obamacare, the Dodd-Frank anti-business “reform,” and Republican President Bush’s Sarbanes-Oxley anti-business reform.

This will weigh heavily on us during the next recession, whenever it occurs. We will by nosediving into a slump from a much lower level than we otherwise would have during a stronger recovery.

And here’s the great director John Ford’s short film on the Battle of Midway, where he was wounded directing crews filming the action. So this is real footage, although the sound effects were added. They didn’t have iPhones in 1942. Ford became an admiral during the war. Two of the narrators you hear are those of Henry Fonda and Jane Darwell, fresh from being directed by Ford in “The Grapes of Warth.”


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  1. Dyspeptic
    Dyspeptic 17 July, 2013, 18:02

    I wonder how many American adults could even interpret the above chart? Maybe 10-15% would be my guess.

    Reply this comment
  2. Sean Morham SIlver
    Sean Morham SIlver 17 July, 2013, 19:54

    What a racist comment! Who cares what Americans think? The country is awakening to a new day..being American is when an individual thinks he/she/both/it is American Who cares where they live? The past is irrelevant, D day was the product of a white imperialistic power looking to master the world, and even worse they used guns to suppress the benevolent German peacemakers.

    Reply this comment
  3. Rex the Wonderdog!
    Rex the Wonderdog! 18 July, 2013, 00:19

    I wonder how many American adults could even interpret the above chart? Maybe 10-15% would be my guess.
    I not in that 10-15%

    Reply this comment
  4. Donkey
    Donkey 18 July, 2013, 01:28

    Our economy will never recover with the weight of our current government hanging around our necks and sucking the lifeblood from the market like a giant, engorged, foul with corruption, parasitic leech, or should I just say RAGWUS!! 🙂

    Reply this comment
  5. Steve Mehlman
    Steve Mehlman 18 July, 2013, 10:03

    Laughable. The stock market is at an ALL TIME high. It has nearly doubled in value since President Obama took office. And you call this a “weak” rally? You’ll go to any lengths to impugn the President, even the absurd.

    Reply this comment
  6. Sean Morham
    Sean Morham 18 July, 2013, 11:03

    What is also laughable is the growth in the money supply, that has fed the bubble in the stock market. When the international financial/currency markets burst, ugh….we will have to see how Big Daddy responds..another excuse for more statism, intrusions to bring on the “audacity of change”….It will interesting how the Supreme Leader is judged long after we are gone to meet our maker…suspect it will be seen as part of a nation’s inevitable decline. Only a great one would have stopped it, but like most politicians..lighweight and a thin skin combined with arrogant hubris don t provide a basis for great leadership..

    Reply this comment
  7. jimmydeeoc
    jimmydeeoc 18 July, 2013, 12:10

    Steve-o is obviously not in that 10-15%.

    Reply this comment
  8. jimmydeeoc
    jimmydeeoc 18 July, 2013, 12:23

    ..But I’ll be patient and write real slow so even Steve can understand:

    Eyeballing the graph were are probably about 30 percentage points below the “trough-to-peak” trend line relationship depicted. In other words, while the Dow sits at an “all-time high” of 15.5K, we SHOULD be up around 17-18K were it not for Obama’s War on the Private Sector.

    That’s your “Hope and Change” opportunity cost, pal.

    Maybe if dimmocrats would take some economics and finance courses in college instead of fuzzy studies they would understand.

    Here’s definitional help if you need it.


    Reply this comment
  9. Steve Mehlman
    Steve Mehlman 18 July, 2013, 19:25

    Figures don’t lie, but liars figure. This is a good example.

    Note how Jimbo ignores one crucial fact: “While the Dow sits at an “all-time high” of 15.5K, we SHOULD be up around 17-18K were it not for the Great Recession, which pushed the market down to below 9K.” But of course Jim can never admit that, because you-know-who was at the helm when the market started crashing. By ignoring it, he can feel free to blame the current President.

    And you don’t need a degree in economics, just a b.s. meter, to understand that.

    Reply this comment
  10. jimmydeeoc
    jimmydeeoc 19 July, 2013, 07:50

    You just proved your ignorance, Mehlman.

    Reply this comment
  11. Steve Mehlman
    Steve Mehlman 20 July, 2013, 10:36

    Yassuh, Dr. Jim Boy, with your PhD in economics, we should just ignore the Great Recession. That’s not ignorance, it’s willful stupidity.

    And at least I have the guts to give my real name and don’t hide behind a fake handle.

    Reply this comment

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