American traders aren’t likely to take kindly to the suggestion that big government might be good for the stock market. But data from a paper on the job- and income-growth of top earners shows that stock prices in some socialized countries, relative to themselves and adjusted for inflation, have done considerably better than those in the U.S over the last two and a half decades.
Specifically, during the twenty five years after Ronald Reagan took office — a pro-market honeymoon that Ryan Chittum of the Columbia Journalism Reviewthis week termed “the ascent of laissez-faire economic policies” — French stock prices have performed significantly better than Americans ones, according to the report by Jon Bakija, Adam Cole, and Bradley Heim.
A further examination of the 39-year period extending from the end of the Nixon administration until 2008 shows the Swedish economy, known for its high taxes and heavy regulation, growing at a significantly higher rate than the US.
The authors conclude that big government might not actually stand in contradiction to a productive economy: “Countries with typically high levels of government involvement in the economy, such as Sweden, Denmark and Canada, do not appear to have experienced stifled economic growth relative to countries where government involvement is more limited, like the US,” the report says.
Just another reason for New England (and other sane parts of the US) to secede from the US and form a modern, reality-based country: it would be a boon for business.
Did you know that nanny-state Germany is the second largest net exporter in the world? It was passed by China last year (but Germany only has 6% of China’s population).