The answer is yes, we are there!
At the low in March 2009 this index was at 350, roughly. Today it exceeded 1050, which, if I am not mistaken is a factor of 3x in 4+ years. The Russell 2000 is,by the way, the quintessential small cap. index. Bernanke should run a banner all across the Fed. buildings announcing mission accomplished. But today we hear nothing of the sort. In fact should unemployment drop below 6.5% the Fed. may still continue to spike the punch-bowl if there are too many people leaving the workforce, which so far has been a primary source of dropping unemployment. This will never end. Even if budget cuts etc. cause the economy to grow at a lesser pace than otherwise, the Fed. reserves the right to increase stimulus. This is pretty circular as government spending at roughly a trillion above what is taken in each year is already excessively simulative so why the Fed. should feel obliged to step in is not at all clear. Taking both the deficit spending and the monetary stimulus combined one could argue that the US is now on a super-Keynes trajectory. That is if you leave out one of Keynes pet concepts, that of the Marginal Propensity to Spend (or Consume), MPS in short. The whole idea is that poorer people spend a larger proportion of their wealth/income than do richer people, therefore the government should redistribute income to the bottom which will then lead to a higher multiplier (bang for your buck) and with it correspondingly higher growth. A glance at a chart showing the wealth distribution in the US from TheUnderstatement.com shows how well this works;
According to this source the top 1% own 43% of all wealth. This is 2011 and their are other stats that put this number well north of 50%. 73% is owned by the top 5%. By stimulating the stock market and housing, the Fed. has made the rich richer and as a result of the very low MPS growth is gone. More stimulus, less growth. All pure Keynes.
