If Marty McFly, hero of the 1985 time-travel movie “Back to the Future,” had traveled 30 years back from today, to 1973, his musical disconnect would have been much less. Traveling from 1985 to 1955, he moved from heavy metal to “Mister Sandman.” Today, unless he specialized in rap music, the teenage time traveler would have found his destination musically pretty familiar.

Other things, too have changed much less in 1973/2003 than they did in 1955/1985. Hill Valley of 1955 seemed unnaturally clean and friendly to 1985’s Marty; a 2003 Marty wouldn’t see much difference, as 2003’s cities are somewhat cleaner than 1985’s, whereas 1973’s were already well down the slippery slope to filth and squalor.

Technologically, the gaps are about equal. The original McFly was able to amaze his 1955 peers with his skateboard, and disturb them with his demands for multiple channel television and Diet Pepsi. A McFly of 2003 would undoubtedly amaze his 1973 peers with a Game Boy, but would be unable to startle them with his cellphone (no cell system built) or his PDI (no Internet, outside the Department of Defense.)

Economically, the pattern is interesting. In some respects — stock prices well off their highs, commodities prices in a sharp upward trend — 2003 resembles 1973, while 1955 and 1985 — sharply rising stock prices, commodities prices in a downward trend after recent highs — show the opposite tendency. In other areas, notably inflation and interest rates, 2003 is a return full circle to 1955, with 1973 and 1985 being years of much higher inflation and interest rates.

Politically, all four dates saw Republican presidents, with 1955 and 1973 seeing Democrat control of both houses of Congress, 1985 seeing a GOP Senate, and 2003 seeing unified Republican control of both houses, but only just. Not a huge movement there. The pendulum of the Supreme Court at all four dates was somewhere in the middle, although in 1973 (the year of the Roe vs. Wade abortion decision) it had only just swung back that way after a decade and a half of liberal dominance.

However, in two respects 2003 is unique among the four dates. The United States is no longer faced with another superpower, but with a myriad of terrorist threats and their supporting outlaw regimes.

And the stock market is on a valuation level far higher than at the other three dates. The price-earnings ratio on the S&P 500 Index, the best broad index of large companies with a long price history, based on four quarters trailing earnings, averaged 14x in 1955, dropped from 16x to 12x in 1973, and rose from 12x to 16x in 1985. All in the same general range, in other words, in spite of the different inflation and interest rate pictures in those years.

At Dec. 31, 2002, based on reported earnings calculated on the same basis as above, the S&P 500 Index was trading at 29x earnings.

In other words, the market in January 2003 was just about double its valuation levels of 1955, 1973 and 1985; if it were to return to those levels, it would today trade at an index value of 450, compared with Friday’s close of 901.78

Since the stock market took off into the stratosphere, a number of theories have been produced to justify its valuation, or even, notoriously, to suggest a valuation of 36,000 on the Dow Jones Index. When looked at through the comparative prism of 1955, 1973 and 1985, however, they fall away.

Interest rates and inflation are much lower than in 1973 or 1985, but higher than in 1955. The 10-year Treasury bond yielded 2.61 percent in January 1955, compared to 4.01 percent at Friday’s close. The consumer price index rose 2.0 percent in 1955, close to its level today.

Of course it’s nice not to be facing another superpower, and certainly defense expenditures are lower as a percentage of gross domestic product than in 1973 or 1985, let alone 1955. However, it would be a bold investor in today’s troubling geopolitical scene who did not feel that the chance of an attack on the United States serious enough to affect the economy was considerably higher than in either the détente year of 1973 or the Geneva talks year of 1985. Maybe it was as high in 1955, with Soviet dictator Josef Stalin only two years dead, but it must be remembered that in 1955 the Soviet Union had less ability to stage a nuclear attack on the United States than does North Korea or possibly even Iraq today.

In 1955 only the United States, Britain and the Soviet Union had nuclear weapons, with the USSR exploding its first H-bomb in that year. However, there was no delivery capability, as neither side had missiles that could reach the other until 1957-58. Hence North Korea and Iraq’s current nuclear capability may be less than that of the 1955 USSR, but their access to missiles that could reach the United States is considerably greater, even if they do not have such missiles currently. The current level of U.S. security against military attack may be higher than in 1955, but only very marginally, and certainly not enough to justify a stock market valuation of double the 1955 level.

Productivity growth is indeed higher than in 1985, but considerably lower than in 1955 or, historically, 1973. According to official figures published by the Bureau of Labor Statistics, labor productivity growth averaged 2.87 percent per annum in the period 1947 to 1973. It then fell off a cliff, averaging 1.29 percent per annum in the 1973-84 period that investors would have seen in 1985, 1.46 percent in the period 1984-1994, and 2.07 percent in the “productivity miracle” years of 1994 to 2001. By comparison with the period to 1973, not only has there been no miracle, there has been a recovery that has regained only half the ground lost in the 1973 crisis.

For a Marty McFly, who can hop around the time lines, it is thus clear that there is no rational justification for today’s stock valuations, even after the considerable decline of 2000-2002. However, what is even clearer to a potential McFly is the pivotal nature of his destination year of 1973.

1955 and 1985 were both years in which economically, existing trends continued (you can make a case for 1985, the year of Mikhail Gorbachev’s accession, being crucial in determining the end of the Cold War, though I’d argue that the Reykjavik Summit of 1986 marked the true turning point).

However, 1973 is a very different matter. Thirty years later, it is clear that 1973 was a crucial pivot in 20th century economic history, comparable to 1929, though different in pattern. While the stock market itself declined moderately during the year, though less, by the S&P 500 Index measure, than in 2002, other economic measures were much less well behaved. The gold price rose from an average $64 per ounce in December 1972 to $108 per ounce in December 1973, on its way to peaks of $184 per ounce in December 1974 and $675 per ounce in January 1980.

As is well known, 1973 was also the year of the first oil crisis, the oil producers’ embargo and price rise sparked off by the Yom Kippur Arab-Israeli war, but following a trend under way before then. In today’s dollars, crude oil in 1972 was about $12 per barrel. By the end of 1973 it had risen to around $30 per barrel in today’s dollars, and was to rise further, to over $60 per barrel in today’s dollars, by its peak in early 1981. The effect of the rise, combined with the disruptions caused by the 1971-73 move to floating exchange rates, was to immerse the U.S. and world economies in an inflationary recession that was to last almost a decade.

Even more important than the oil price rise, however, was the explosion in government activity that began around 1973. This can be examined by taking the un-weighted average ratio of government spending to gross domestic product for 16 members of the Organization for Economic Cooperation and Development, whose statistics go back to 1970. In 1970-73, the ratio rose slightly, from 31.8 percent to 33.0 percent. From 1973, the upward trend grew much steeper, with the ratio rising in every year, to an initial peak of 45.0 percent in 1983. Since that time it has fluctuated, with its highest level being 48.1 percent in 1990, and a gradual modest drop during the booming 1990s to a bottom of 41.3 percent in 2000, rising slightly to 42.4 percent in 2002.

The upward trend in government spending in 1973-83, 12 percent of the 16 countries’ economy being diverted from the private to the public sector in those years, is itself sufficient to explain the end of the strong productivity growth that had been seen before 1973 in most Western economies, and its replacement by stagnation. Since 1983, those countries such as the United States and Britain that have forced public spending once again onto a downward trend have seen a modest renewal of productivity growth, although not to the levels of before 1973. Those countries such as France and Germany that have made no real attempt to cut back public spending have remained more or less stagnant, with productivity growing slowly if at all. Japan, whose productivity grew at miraculous levels until 1973, also saw the growth in government slow its growth in productivity, although even in the no-growth 1990s Japan’s productivity grew faster than in Western Europe.

An economically savvy Marty McFly can thus learn two things from a trip to 1973. The stock market is currently still at about twice its proper level. And if government spending is allowed to rise, from its already quite elevated level, the productivity miracle will go into reverse, with stagnation spreading throughout the Western economies.

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(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)

This article originally appeared on United Press International.