47% of Americans do not Pay Federal Income Tax?

[Conan71]

Conan, it is great if you invest a lot in a brokerage account and don't invest in mutual funds in a 401k.  A lot of people don't trade stocks except maybe tweaking their mutual fund.  That means when you go from 2000 to 2010 and you don't actively sell or move around your cash in your 401k, you would be happy to break even (Assuming they didn't out or under perform the DOW). So going 10 years with inflation and no growth is kind of a big deal.  I remember a president saying we should invest all our social security money and HSA accounts in the stock market.  Yes, you can thank Bush for setting up the events to hit 14,000.  Then you can thank him for the events that sent it to 6,600.

Your assumption only makes the assumption omeone bought all their shares the day before Bush entered office and sold them the day he left.

As long as people moved their funds around, they lost nothing.  If you keep standing on the tracks when the train is blowing it's whistle, you deserve to get hit.  Unfortunately, too many private "investors" only take a passing interest in their 401K or IRA.

Honestly, to lay all the blame or credit for the markets at the foot of any President is inaccurate.  A President can do a lot to inspire or inhibit investment but there's way, way more in play here. I don't think anyone can honestly deny that President Obama and Secretary Geithner took way, way too much time to start talking up the economy.  To the contrary, they kept campaigning against it and the failures of the Bush admin for the first six weeks they were in office.  Every time Geithner or President Obama spoke about anything related to money, the market would take a dive.  I'm talking out of both sides of my mouth here with my complaint, because I did buy a lot of stock the week of 3/6 last year and it's panned out nicely.

I absolutely hope the market keeps growing from here.  I also hope the Obama administration brings the most overall prosperity we've ever seen to the United States.  If that's their plan, I think they are going about it all wrong, but we shall see in the long run. 

[nathanm]

...and the Dow was over 14,000 during the BushII admin

The market always peaks just before the bubble bursts. If it had been a meaningful accomplishment, we wouldn't have seen the Dow cut in half.

That said, I think it looks like somebody's inflating a bubble again somewhere, I just haven't figured out what it is yet. It can't just be the increased money supply, as inflation is still very low thanks to the previous lighting on fire of trillions of dollars and the fact that banks are still being pretty stingy.

It'll be interesting to see what the housing market does once we stop giving people money to buy houses.

[Conan71]

The market always peaks just before the bubble bursts.

Well, DUH! Thank you Mr. Obvious.

[nathanm]

Well, DUH! Thank you Mr. Obvious.

You're the one who seemed to think 14,000 was some sort of accomplishment.

[Conan71]

You're the one who seemed to think 14,000 was some sort of accomplishment.

No more than it hitting 11,000 is.

[nathanm]

No more than it hitting 11,000 is.

That remains to be seen, but as I mentioned earlier, I'm operating under the assumption that there is a bubble being inflated somewhere, probably in even more esoteric and opaque (to us laypeople) derivatives than the MBS-backed CDOs that precipitated the last bubble.

[Conan71]

That remains to be seen, but as I mentioned earlier, I'm operating under the assumption that there is a bubble being inflated somewhere, probably in even more esoteric and opaque (to us laypeople) derivatives than the MBS-backed CDOs that precipitated the last bubble.

Yeah, but this bubble won't be as bad because it's Obama's bubble and not Bush's, right? 

Just making sure I've got the facts as you see them straight.

[fotd]

The only bubble out there is deflation and the only way to pop it is to print more money....

[nathanm]

Yeah, but this bubble won't be as bad because it's Obama's bubble and not Bush's, right? 

At the moment, it's not as bad because it's not inflated as largely. The only blame Bush should get for the previous bubble is his policy of asking the regulators to please go take a nap while the big boys played with our money. Similarly, if Obama's regulatory institutions fail to contain a new bubble, he deserves criticism for that.

What does annoy me significantly about whoever's decision it was to do financial reform after healthcare reform is the relative importance of the two. While I understand the political calculus (get the Republicans out against any regulation just before the midterms), I think the financial reform is far more important to our country's future.

Don't get me wrong, I think HCR was important, just not as important as preventing a second round of financial armageddon.

fotd, I wish I could believe that. I just don't think the fundamentals are there for a Dow at 11,000, what with the deflation and all.

[Gaspar]

What does annoy me significantly about whoever's decision it was to do financial reform after healthcare reform is the relative importance of the two. While I understand the political calculus (get the Republicans out against any regulation just before the midterms), I think the financial reform is far more important to our country's future.

Don't get me wrong, I think HCR was important, just not as important as preventing a second round of financial armageddon.

+1

[fotd]

fotd, I wish I could believe that. I just don't think the fundamentals are there for a Dow at 11,000, what with the deflation and all.

Uh, what else is pushing the market higher? Rates are deflated....fixed assets are deflated....commodities have flat lined....

The stimulus money pushed the market higher...and it's still moving even higher towards 12,000. You people who keep thinking we're breaking the country and that the pouring money into the economy does not work just don't get it....you've been drinking that Reagan kool aid for far too long. Tear down that myth.

Where's an economist when I need one?

One more thing, employment and labor wages are also deflated.

[nathanm]

Uh, what else is pushing the market higher? Rates are deflated....fixed assets are deflated....commodities have flat lined....

I'm a firm believer in Keynesian economics. I think the stimulus hasn't even been enough to cover the deflation caused by the meltdown, hence my skepticism about the stock market's fundamentals and expectation that there's a new bubble somewhere.

It's possible that it's merely due to low bond yields and relatively flat commodities prices, but I don't think that's enough to explain it. Oil has been trending higher as of late (although the last few days haven't been particularly good), and gold, while not performing as well as it did last year isn't exactly losing much value at the moment, so where is the money coming from?

I suppose it could be the investment-banks-turned-regular-banks borrowing from the discount window. I don't have enough information to do more than speculate at the moment.

[heironymouspasparagus]

Conan
You know why we go back to the past - those who don't know it are doomed to repeat and all that jazz.

I don't even come close to justifying the spending.  Have been railing against it since the '60s.  Just a day or two ago I made another impassioned plea to abandon the fantasy world of tax cuts and look to spending cuts.  Just really hate to see the true revisionists so hard at work with their lies - you know who they are - Cheney/Rove/Murdoch and their ilk.  And I do mean ilk in the ilkiest sense of the word.

The thing that set the economic ship in the path of needing righting had a lot to do with policies that we had in place back into the '20s.  Including things like support of kicking the Palestinians out of their homes.  Putting our puppets in place of the duly elected and otherwise duly chosen people in places like Iran.  Panama.  Nicaraqua.  Viet Nam.  But we were doing it to fight communism. 

And since we have no knowledge or sense of history, our entire country is afflicted with a condition similar to Drew Barrymore in the movie "50 First Dates".  We awaken every morning and wonder why anyone could possibly be mad with us about anything and are particularly indignant when much of the world doesn't have any interest in falling in line with us.

Nixon was a complete mess from the get-go.  As you well know.  As far as the economy, well it was Nixon who came up with the idea of wage and price controls in peace time.  To do mortal combat with an inflation rate of about 6%.  Oh, how I long for those good old days.

Reagan had a couple things in mind.  He bought into the idea of "Star Wars", which being heavily into technology, I appreciate a great deal, but knew that it was many years away and very expensive.  And second, but much more important, he thought it would be a good idea to "spend" the USSR into oblivion.  Well, at least that worked, but with the unwanted side effect of doing same to ourselves.  And how is that "getting rid of USSR" working out for ya'??  They did have a few moments of semi-democracy about 20 years ago, with the side effect of empowering, emboldening, and expanding the Russian mafia, which now competes on nearly equal footing with the old style KGB government from the good old days.

As far as stimulus, well '81 to 89 was just about as effective as what we have now.  In other words, much less than optimum.  Not failure, just not wildly successful.

And if one is going to be indignant about the current stimulus, then why would one not be indignant about unfunded wars - two of them - one of which was actually warranted.  Massive "unfunded" tax cuts to only the wealthy.  Unfunded bailouts for banks and insurance companies of over a trillion.  Unlawful actions of almost elected officials.  (How much indignation can one stand?)

[fotd]

Reagan alone did not spend the Russians into oblivion. It took a quarter century. He just happened to be in office when the deal came down. Don't give him so much credit. He had the onset of Alzheimers.

[Red Arrow]

A quarter century of cold war spending left the USSR less capable of withstanding the spending on Star Wars.  Reagan caused the straw that broke the USSR but I agree he was not solely responsible for the demise of the USSR.