Tuesday, May 8, 2007

The "Roaring Twenties" are back!

As most people who read financial news know the stock market is on the longest bull run in 80 years. Analysts are trying who to give the credit to - was it the Bush Tax Cuts or the Fed or the election of Democrats to Congress?

I think all of these ideas are incorrect because they lack long term perspective. As I wrote in the Greatest Economy Ever, and here the real reason for our current economy have to do with macro trends. The stock market boom in the 1920's was due to fundamental changes in our economy caused by the Industrial Revolution. Great companies like Ford, GM and DuPont were creating wealth by developing new technologies that increased productivity. Likewise, today technology is driving improvements in productivity that are increasing our prosperity.

The triumph of capitalism is the greatest unreported story of the last 100 years and it amazes me how the socialists still want to cling to the dream of Marx.

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