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The Dow Jones Industrial Average has reached a record high, prompting investors around the world to wonder just how much higher the bull market could conceivably climb.
In 1999, Bush Institute executive director James K. Glassman co-authored a book titled “Dow 36,000.” Although this week’s record Dow clocked in a good deal below that mark (the Dow is just higher than 14,300 as I write), it seems likely that the 36,000 level will be achieved someday. To get there, stronger economic growth is our best hope, writes Glassman in a column published today by Bloomberg View.
In fact, Glassman says:
For investment gains over the long term, there is absolutely no substitute for faster economic growth.
To get it, we need policy changes that will create a better environment for businesses to increase revenue, profits and jobs: a rational tax system that keeps rates low and eliminates special deductions and credits; immigration laws that encourage the best and the brightest to move here and stay; entitlement reform to bring down costs and provide incentives for productive seniors to keep working; sensible environmental, workplace and financial regulation that allows entrepreneurship to thrive; a K-12 education system that boosts student achievement and holds teachers, administrators and politicians accountable …
These are the kinds of policy reforms that the 4% Growth Project has highlighting over the past year. As Glassman mentions in his column, we think 4% annual growth is an achievable target, but first our country must make growth the main focus of economic policymaking.
This is important because, as Ike Brannon has highlighted, sustained growth of 4% would yield tremendous benefits to our country. It would almost certainly get us to Dow 36,000 as well.
Read Glassman’s Bloomberg column in its entirety here.
Matthew Denhart is an expert on immigration policy and is the author of the Bush Institute’s America's Advantage: A Handbook of Vital Immigration and Economic Growth Statistics, now in its third edition. He currently serves as executive director of the Calvin Coolidge Presidential Foundation and is a founder of the Coolidge Scholars Program which provides full-ride merit scholarships to America's most promising college students. A summa cum laude graduate of Ohio University, Denhart has written and spoken widely on a variety of policy topics including the economics of higher education, labor, and taxes. He has contributed articles to numerous national publications including The Wall Street Journal, Forbes.com, CNN Opinion, and Bloomberg View.Full Bio
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