Prosperity's Champions vs. Those Who Jeopardize It
April 21, 2000
The stock market -- which is, after all, the daily sum of millions of investors' decisions -- has undergone a major correction in the past several weeks. Informed observers are pointing to Washington's ill-informed policies as the source of its discontent.
- After President Clinton and British Prime Minister Tony Blair announced the human genome should be public property, biotech stocks suddenly plunged -- and have fallen about one-third since investors learned that the genome would not be up for patent.
- After Judge Thomas Penfield Jackson's decision slammed Microsoft on alleged antitrust violations, high-tech stocks plunged and the NASDAQ suffered two of the most volatile trading days in market history.
- The market got a third shock on April 14, when it was announced that the consumer price index rose 0.7 percent in March over the previous month -- signaling that inflation might be taking hold; while stocks have largely recovered, bonds have not.
- The demonstrations of left-leaning groups in Washington reminded investors that anti-capitalists -- who for decades had been in rout -- were still actually around.
Knowledgeable observers point out that concrete policy changes made during the Reagan era made the prosperity of the 1990s possible: the taming of inflation, the end of the Cold War and high military budgets, and an increase in breathing room from stifling regulations. But where, they ask, are similar beneficial reforms that could have been made in the 1990s to assure continuing prosperity in the first decade of the 21st century?
Source: Lawrence Lindsey (American Enterprise Institute), "Washington Leads Bulls to Slaughter," Wall Street Journal, April 21, 2000.
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