On Wed, Feb 05, 2003 at 11:26:55PM -0600, Steve Sloan II wrote: > It wouldn't have to be random to be completely independent > of which politician was in power.
Actually, I think that (independent of President) is exactly what was meant by "random" in this context. > Clinton's administration saw a genuine technological boom in the > internet, and in companies that do all their business on the internet. Historically, technological improvement has had little effect on the stock market. One reason is that for companies to benefit from technology, they usually have to upgrade their capital which subtracts from profits. Some claim there was a genuine labor productivity increase recently due to computers, but if true it looks to be only a small factor in the overall market return. Here is some historical data from Siegel. It is total annualized real US stock market return. 7.0% 1802-1870 6.6% 1871-1925 6.9% 1926-2001 7.1% 1946-2001 Note how stabile the stock market returns are over longer time periods. It is even more dramatic if you see the cumulative return graph over the last 200 years. It just follows the same slope of doubling every 10 years with the booms and busts looking like only slight deviations from the straight line around 7% per year. Consider that over this period the US evolved from agricultural to industrial and then post-industrial (service and technology oriented) economies. Electricity, radio, television, farming technology, railroads, cars, air travel, military technology, space travel, nuclear power, computers, Internet. And the slope of the stock market return never deviated more than 0.5% from 7.0%. > Still, I think that advances in technology, especially the computer > industry, drove that economic boom far more than any politician's > policies. I think it is very unlikely that the boom was driven by real advances in profitability due to technology. It might have been driven by human PERCEPTIONS of those advances, but that is quite a different thing. > If anything, maybe better economic policies could have tamed that ugly > boom and bust cycle a little bit. Maybe, but how? During 1999 and 2000 as the Fed raised interest rates (and after Greenspan's famous "irrational exuberance" comment), the market continued to increase at a dramatic rate. What more could have been done to combat the madness of crowds? -- "Erik Reuter" <[EMAIL PROTECTED]> http://www.erikreuter.net/ _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
