On May 25, 1983 Star Wars Episode VI: Return of the Jedi was released in theaters around the globe. Our hero Luke Skywalker had matured into a Jedi Knight and saved the world from the second and greatest Empire Death Star, turned his father Darth Vader from the dark side and watched as the evil Emperor was cast into the massive machine's reactor never to be seen again. In 1983 most of Americans were ready for a new hero to defeat the evils of stagflation and give us hope in the future.
The new hero was Ronald Regan who delivered the message of optimism we desired. The Dow Jones closed at 1229.02 on the day Return of the Jedi was released, just slightly above the close of ten years earlier. For the next fifteen years with only a single blip, the US Economy grew. The Dow Jones reflected this fully, averaging a 14.29% compounded growth rate (excluding dividends) to end at 9114.14 on May 25, 1998.
With hindsight as a guide, the vast majority of our economic historians will have both an answer as to why this took place and how to apply it to correct our current mess. Well let me go out on a limb and tell you that the reason our economy recovered in the 1980's and what it will take to get out of the mess today are one and the same; an optimistic person. It takes each of us, one by one, to have enough faith in the future to take the steps necessary for a recovery. If we have no faith that our job is secure, why would we buy a car? If we have no faith that our job is secure and that the price of housing has stabilized, why would we buy a house? If a business man or women has no faith that expansion of his factory or retail store will not generate profits, why would they invest any cash into an expansion program
Our political leaders are fully aware that their power resides in their ability to manage the minds of the majority of their constituents. Over the past year we have been in a political war. The message was delivered with the goal of winning your mind and your vote. It was not a pretty sight. In fact, more than one half of the voters in this country fully believed that the previous administration was the worst this country has ever seen. History will correct this, however, the "message" was necessary to earn your vote.
Our newest President is a master of this process and has been using this message of despair and blame to become our newest president and to encourage the passing of a stimulus plan just last week. Will it work? I believe it will, not because of what is in the plan itself, but how the message of our political leaders will change from the negatives to the positives needed for recovery.
Over the next few months our newest hero, President Barrack Obama will be the primary force behind this change. Instead of delivering his message from Peoria, IL where 20,000 jobs were lost, he will deliver his message from a location that is showing growth and stability. Instead of emphasizing the decline in GDP, he will be emphasizing the positive side of the economic data. He will be delivering the message of "hope" that each of us desire with a new vigor that will have a positive impact on you and me who by ourselves have the power to create an economic recovery.
Anderson Griggs & Company, Inc., doing business as Anderson Griggs Portfolio Management is a registered investment adviser with the US Securities & Exchange Commission. Pursuant to laws and regulations Anderson Griggs also maintains notice filing with several individuals state regulators including North and South Carolina. Anderson Griggs only conducts business in states and locations where it is properly registered or meets state requirements for advisors. This commentary is for information purposes only and is not an offer of investment advice. We will only render advice after we deliver our Form ADV Part II to a client in an authorized jurisdiction and receive a properly executed investment Management Agreement. Any reference to performance is historical in nature and no assumption about future performance should be made based on the past performance of any Anderson Griggs Investment Objective, individual account, or index. The authors of publication are expressing general opinions and commentary. They are not attempting to provide legal, accounting, or specific advice to any individual concerning their personal situation. Anderson Griggs Portfolio Management's office is located at 113 E. Main St., Suite 310, Rock Hill, SC 29730. The local phone number is 803-324-5044 and nationally can be reached via its toll-free number 800-254-0874.