* Robert J. Chassell ([EMAIL PROTECTED]) wrote: > If that is the case, it would be a good idea to figure out the > overshoots. (I can think of several, such as commercial strip > developments, regional schools, ...)
I'm not sure where you got that. It is not what I meant, although I was oversimplifying quite a bit to make a point. > If the difference is more than 10%, Then it would be worth considering > Erik Reuter's point. What overshoot do we expect? What were bad > policies? How have circumstances changed so that previously good > policies have turned bad? I'll try explaining a different way. Think of a new CEO taking over a company that was previously badly run. Poor leadership had resulted in the company losing market share (although the total market size was and is growing) and not taking advantage of ways to cut costs and increase efficiency. Earnings growth was depressed to only 2% a year. The new CEO comes in and does such a good job that market share increases drastically until the company has a near monopoly. Earnings growth skyrockets. Irrationally exuberant investors extrapolate the 30% per year growth of the last couple years forward for 30 years and value the company at 300 times earnings! Unfortunately, the overall market is only growing at 6% a year and now that the company has monopolized the market and implemented most of the cost savings and efficiency improvements possible, earnings only grow at 6% a year. The investors who extrapolated the 30% per year forward take a bath. Doh! The point is that the data you are looking at should NOT be used in the way you propose. The data certainly suggest that Democratic policies have generally moved the economy in the direction of higher growth than Republican policies. But to take a historical record where Democratic and Republican policies alternated and extrapolate what would have happenened if the lowest growth years were dropped and replaced by the highest growth years, and to conlcude that this exuberant growth rate could realistically have been achieved for the entire period -- this is similar folly to that of speculators during the 1999-2000 stock market bubble. -- Erik Reuter http://www.erikreuter.net/ _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
