NCPA - National Center for Policy Analysis

Who To Thank For Dow 10,000?

March 30, 1999

The Wall Street Journal credits former President Ronald Reagan for the Dow Jones Industrial Average's almost unbroken climb since the early 1980s -- from 1,000 to yesterday's 10,006.78. Reagan's policies of sound money, lower marginal tax rates and deregulation -- combined with technological revolutions in biology and electronics -- have caused today's unparalleled prosperity.

The DJIA first closed above the 1,000 mark on November 14, 1972. But then it managed to tread water for about ten years. Wage and price controls under President Nixon and inflation under President Carter clamped a lid on the index's progress.

Here are some comparisons of what life was like in 1972 versus recently:

  • Both then and now, General Motors was the number one company in the Fortune 500 -- with $30 billion in sales then, compared to $178 billion now.
  • A new one-family median-priced home cost $29,700, not adjusted for inflation, versus $151,300 as of the end of 1998.
  • In 1971, 27 percent of households were invested in the stock market, while 45 percent are now.
  • Average household net worth grew from $65,517 to $358,297.

Total net assets in mutual funds have skyrocketed from $59.8 billion to $5.7 trillion. Paralleling the Dow's rise, the total market value of stocks held by households has climbed from $1 trillion to $10.8 trillion.

There have been sociological changes too.

  • Households with two or more earners climbed from 59 percent in 1972 to 66 percent as of 1997.
  • Women comprised 38 percent of the work force then, compared to 46 percent in 1997.

Sources: Editorial, "The Road to 10,000," Wall Street Journal, and Edward Wyatt, "Does the Dow Measure Up?" New York Times, both March 30, 1999.


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