George Will Is the Latest To Expose the Half-Witted 'Fed Did It' Narrative
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“Money invested in the S&P 500 in 1990 is worth four times more than if it had been invested in any other wealthy country’s stock market.” Those are the words of George Will in a recent column. They signal so much, and not just that rumors of America’s death are greatly exaggerated.

For the purposes of this write-up, they render as laughable the always laughable narrative that the source of U.S. stock-market strength was and is an “easy” Fed. It’s amazing even the ignorant could believe that which so thoroughly vandalizes reason.

In reality, markets gain essential strength from periods of weakness whereby a surely abundant past is replaced by an even greater future. Returns since 1990 loom large here in consideration of the easily-forgotten truth that Circuit City was the best performing U.S. stock of the 1980s. In the 2020s it no longer exists.

Precisely because equity markets are a look into the future, they’re by the previous description a look into what will replace the present. Figure that in the 1990s through much of the 2000s,  Blockbuster Video’s dominance was such a known that its ability to combine with other video rental chains was severely limited by federal regulators. Of course, what sealed Blockbuster’s brutal fate wasn’t a failure to acquire Movie Gallery, but it was very much a function of it passing on buying Netflix not once, but twice.

Notable about the year 2000 is that when the 21st century dawned, GE was the world’s most valuable company at $585 billion. Tyco was seen as the next GE, Enron was the best managed company in the world, and then Yahoo and AOL were viewed as the gold standard of a rising internet economy.

Parallel to the blue chip-ness described above, it’s notable that in 2000 Apple was limping uncertainly out of near bankruptcy, Google was an unknown private company, Amazon was “” given its inability to turn a profit, Microsoft was trying to pick itself up after the Clinton DOJ’s attempt to break it, and then Facebook didn’t exist on account Mark Zuckerberg still toiling away in high school.

Please keep all of this in mind with the always ludicrous “the Fed did it” narrative top of mind. Readers should do so simply because the companies powering present stock-market vitality weren’t a factor not terribly long ago.  

Which means that if the Fed did it as the simpletons in our midst routinely tell us, they would not only have to have engineered policy in a way that put the past well out to pasture (see above, GE, Tyco et al), they would have had to similarly have turned their money magic to companies that, by virtue of their valuations (or non-existence) in 2000, were either troubled, a joke (see Amazon), or unknown when the 2000s dawned. Sorry, but the Fed narrative doesn’t just run up against illogic, it is also exposed as thoroughly wanting by last names like Bernanke, Yellen, and Powell.

The simple truth is that what powers U.S. equity indices above all others is remarkable U.S. businesses replacing formerly remarkable U.S. businessses. To presume otherwise, as in to presume the Fed did it, is to believe that the deepest markets in the world are tricked by the feeble minds inside the Fed and their ability to engineer stasis. No, not at all.

Markets once again attain strength from weakness whereby the past is replaced by the future. In short, if the Fed’s power were real, U.S. equity indices would have long underperformed other countries. See Circuit City, Blockbuster and GE to understand why.  

John Tamny is editor of RealClearMarkets, Vice President at FreedomWorks, a senior fellow at the Market Institute, and a senior economic adviser to Applied Finance Advisors ( His latest book is The Money Confusion: How Illiteracy About Currencies and Inflation Sets the Stage For the Crypto Revolution.

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