With all the caveats about the Dow Jones index, it’s still one of those numbers that resonates in the national economy when it reaches a new record.
Sure, it’s not as broad-based as other indexes and is almost a holdover from the days when 30 or so industrial stocks were the national economic thermometer. But its new high nevertheless represents another milestone in economic recovery.
Its recent high note is a reflection of generally positive reports about business activity across the country, compiled by the Federal Reserve into its “beige book” on what regional Fed banks are seeing in their areas.
Reading the beige book reports also should be a reminder, in these pages as elsewhere in the news, that the influence of Washington or Baton Rouge can be overstated: The real economy is influenced by political decisions, to a point, but mostly by the underlying strength of capitalism.
Yes, the economy did respond to higher taxes, when a payroll tax cut expired in January, and there is probably going to be some impact from a negative decision in Washington, to allow the “sequester” of some federal spending to take place.
Yet these are barnacles on an immensely larger vessel, fueled by winds that are far more powerful than the oarsmen in the U.S. Capitol or state capitols — particularly when the so-called statesmen are using the oars to beat each other over the head, instead of rowing.
So with all the caveats about the Dow, and a necessary caution where government intervention is concerned, let’s remember that free enterprise and free people remain the most important economic factors.