(MONEY Magazine) – University of California at Davis economist George Bittlingmayer has concluded that increased antitrust enforcement is a prelude to a bear market. The feds' cases against Microsoft and Intel make it seem like a good time to ask about his work.

Q. What's the best example of the connection between antitrust action and the stock market?

A. When Hoover came in as President in 1929, like a good Boy Scout he said: "Oh, my gosh, we're not enforcing the law." Very quickly there were actions against high-profile movie companies. The market went down. That's not to say that Hoover caused the Depression, but the change in policy was very plausibly the cause of the crash.

Q. Can you explain how stricter policy causes downturns?

A. During periods of lax antitrust enforcement, when there is the threat of corporate takeover, managers pay more attention to the interests of shareholders. If the government impedes M&A, managers feel that they can run companies for their own benefit.

Q. So is the market going to crash because of the Microsoft and Intel suits?

A. If the government moves against business strongly, I would say with virtual certainty that the market would go down. --Malcolm Fitch