STILL REACTING TO REAGANONOMICS:

Amid Today's Gloom, Don't Forget: We've Had 25 Years Of Prosperity (JACK KEMP, August 14, 2007, Investors' Business Daily)

As the widely respected New York Times financial journalist Floyd Norris wrote, (and blogged) recently, the Dow Jones industrial average hit bottom on Aug. 12, 1982, at 776.9, while interest rates were at 15%.

Since that date, the compounded rate of return from the last quarter of 1982 until this summer, circa 2007, has been 11.8%. Taking into account inflation, the rate of return has been 8.5%. Norris pointed out this quarter of a century is the best ever in U.S. history.

This remarkable achievement didn't just happen, it was the result of policy decisions in the 1980s, '90s and more recently — confirming the fact that lower tax rates on capital and labor, sound monetary policies, with open market initiatives and liberalized trade leads to stronger economic growth and rising values in equities.

We neglect these lessons at our peril.

As economist Art Laffer pointed out recently, "if these pro-growth policies that have led to our 25-year bull market are reversed, don't be surprised if our financial gains and competitive edge quickly disappear."

Make no mistake dear readers, listening and watching the presidential candidates in the Democratic Party debate over the economy, I believe they are all headed in the direction of higher tax rates and protectionist trade policies.

Have they all forgotten John F. Kennedy in the early 1960s and indeed Bill Clinton in the 1990s? Where, oh where is the pro-growth, pro-trade, pro-internationalist wing of the Democratic Party?