WHINING ABOUT THE ECONOMY

I’ve been reading and listening to a lot of whining about the state of the economy in the last few weeks. According to the candidates – on both sides, unfortunately – the economy is in the tank, the Great Depression is about to begin, and we’re all gonna die!

From the Democrats, life was wonderful during the Carter/Clinton years; and in the tank during Reagan/Bush I/Bush II. From the Republicans, the opposite.

Yeah, right. Let’s look at it. Here’s a chart of the state of the economy for the last 30 years. The top line is the Dow Jones Industrial Average, which I’ve used as a surrogate for economic growth. The bottom line is the annual inflation rate.

I don't know about you, but that looks pretty good to me. Inflation peaked at about 13% the last year of the Carter administration, and has steadily declined to about 3% in 2007. Economic growth as measured by the Dow Jones Industrial Average has been about 9% (post-Carter), with a breather the last two years of the Clinton administration followed by 9/11. Since 2003, growth has resumed in the 9-10% range.

Doesn't look so bad to me.