Number of US public companies in 1997: 8800. Number today: 4100. Total stock market index fund return adjusted for inflation between 1997 and today: 0%.
Total returns would actually be almost double that, since that graph doesn't include dividends, which historically account for just under half of total returns.
Most common price measurements have increased by 100%+ since 1997 (in many cases a lot more), from housing to commodities. There's a very strong case to be made that the real rate of inflation has just about wiped out all stock market returns since the mid to late 1990s.
I don't know if it's 0%, but even 20% inflation adjusted over 16 years is a very bad return.
And if you add the year 2003 to those two cherry-picked years, do you still see a correlation between total stock-market returns and number of public companies?
Agreed. Here's the data in chart form, it looks nothing like total stock-market return (the 2008 collapse and subsequent rebound is nowhere to be found, etc):
