By Published on .

There is a powerful disincentive for our economy to shift into high-octane growth, and that's the stock market. It's what's causing the disparity between people who are reaping the rewards of our prosperity and those who are not. It's also keeping advertising budgets low.

As we all know, the stock market reacts negatively to good news, as it did on July 5 when the government announced that the unemployment rate dropped to the lowest point in six years. The market also rewards companies that lay off thousands of people.

Who's getting rich in this scenario? People who are big investors and top management who have stock options.

Who loses? People who could qualify for better jobs if the economy were growing faster-which it isn't because everybody from the Federal Reserve to Wall Street is deathly afraid that a faster growth rate will cause high rates of inflation, the worst of all possible sins.

But Robert Eisner, professor emeritus at Northwestern University, argues that if the unemployment rate fell a percentage point a year for the next two years, to 3.5%, it would spark four percentage points of greater output, or $300 billion by 1998.

"Think what that would mean for every problem of the economy, real or imagined," Professor Eisner wrote in The New York Times. "In five years, it would bring a painless reduction of $180 billion in the annual deficit, as tax revenues increased, without raising tax rates, and unemployment and welfare outlays declined."

And think what it would mean for the advertising business. One of advertising's major accomplishments is that it can spur growth, if given the opportunity. If we followed Prof. Eisner's suggestions, advertising would play a big role in helping the economy grow by that $300 billion.

Wouldn't that be a worthy agenda for the advertising trade associations to push in Washington?

As Professor Eisner stated: "So let the Fed-and all the policy makers-divest themselves of the dogma that unemployment can be too low, and rather promote maximum employment and economic growth. And as Wall Street witnesses that growth and perceives that the Fed is not trying to stop it with higher interest rates, we might as well expect the Dow, and not inflation, to go ever higher and higher."

Not to mention ad budgets.

Speaking of ad budgets, isn't it remarkable how the big beer companies are wasting much of theirs? I thought Budweiser was having a tough time until I saw how the new Miller beer is floundering. Its slogan, "Reach for what's out there," was incomprehensible, and now Miller is trying to establish the brand with what I suppose passes for humor.

Miller's got a great theme in its own archives. When Bill Backer was inducted into the Advertising Hall of Fame this spring he played a reel of commercials he was responsible for-and proud of. Among them was a spot for Miller High Life with the memorable tagline: "If you've got the time, we've got the beer." How can you improve on that?

Most Popular
In this article: