Broken record-Barrons letter to the editor

Article Highlights

  • The U.S. dollar's purchasing power already is 10% less than it was in 2007.

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  • The 2007 Dow Jones Industrial Average high stated in 2013 dollars is 15,648.

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  • In reality, we are still 1,500 points below the Dow Jones Industrial Average peak.

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To the Editor:

The March 4 edition was crammed with mentions of how the Dow Jones Industrial Average had, by March 1, "almost reached its all-time high" of 14,198 of October 2007. Here we have rampant "money illusion." Since 2007, the Fed has been busily printing away, and the dollar's purchasing power already is about 10% less than it was then. The March 1, 2013, close of 14,090 is only 12,784, when stated in 2007 dollars. The 2007 high stated in 2013 dollars is 15,648. In reality, we are still about 1,500 points below the previous peak.


Alex J. Pollock
Resident Fellow
American Enterprise Institute
Washington

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About the Author

 

Alex J.
Pollock
  • Alex J. Pollock is a resident fellow at the American Enterprise Institute (AEI), where he studies and writes about housing finance; government-sponsored enterprises, including Fannie Mae, Freddie Mac, and the Federal Home Loan Banks; retirement finance; and banking and central banks. He also works on corporate governance and accounting standards issues.


    Pollock has had a 35-year career in banking and was president and CEO of the Federal Home Loan Bank of Chicago for more than 12 years immediately before joining AEI. A prolific writer, he has written numerous articles on financial systems and is the author of the book “Boom and Bust: Financial Cycles and Human Prosperity” (AEI Press, 2011). He has also created a one-page mortgage form to help borrowers understand their mortgage obligations.


    The lead director of CME Group, Pollock is also a director of the Great Lakes Higher Education Corporation and the chairman of the board of the Great Books Foundation. He is a past president of the International Union for Housing Finance.


    He has an M.P.A. in international relations from Princeton University, an M.A. in philosophy from the University of Chicago, and a B.A. from Williams College.


  • Phone: 202.862.7190
    Email: apollock@aei.org
  • Assistant Info

    Name: Emily Rapp
    Phone: (202) 419-5212
    Email: emily.rapp@aei.org

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