Committee Of Correspondence

What is Wall Street Saying?

Herb Stein
1:26 p.m.  Friday  7/27/96

When we began this exchange, at the opening of the market on July 22, the Dow Jones Industrial Average stood at 5414.24. As I write this, at the close of business Friday, July 26, the average is 5473.06. Apparently our discussion did not depress the market, although a deeper analysis might show that the market would have risen more if we had not been talking about it all week. Since I have been chastened for using the word “eye-opening,” let me say that I think the discussion has widened the range of possibilities to be considered, for me and I expect for some readers. Where to come down within this range I leave to the readers. I would only record this personal impression. The discussion leaves me less comfortable about the stock market than I was but more comfortable about the economy. There have been numerous stock market declines in this century. Some may have had some influence in causing or worsening declines in the general economy. But they do not seem to have been the determining factor in the worst traumas of our economic history and the suggestion that we may have serious stock market declines in the future does not imply that we shall be unable to keep the general economy on a reasonably even keel. One of my favorite quotations is from Adam Smith: “There is a great deal of ruin in a nation.” One could also say that there are a great many stock market declines in a healthy economy.” I want to thank the panelists for sharing the results of their research and experience with us and for the diligence with which they have participated in this discussion. Next week’s discussion will be on “Advice for Dole.” The panelists will be:

  • Robert Bartley, editor and vice president of the Wall Street Journal.
  • Christopher DeMuth, president of the American Enterprise Institute for Public Policy Research.
  • Gov. Frank Keating, Republican of Oklahoma.
  • Mary Matalin, political talk show host for CNBC and CBS Radio.