Republicans. The dinner I attended last night after the Dow closed down another 300 points was supposed to be about boating, but the speaker manages a large brokerage house and his talk turned into a tirade about the sensationalist press grasping for ratings by spreading panic about the economy. I recall some film clips from 1929 with a similar message that encouraged people to buy, buy, buy because prosperity was just around the corner. It was of course, but the corner was a long way off.
He compared the financial press to the Weather Channel, which has dramatically increased ratings every time a hurricane is predicted. Ratings or no ratings, the three hurricanes that have devastated my town three times in the last few years were real enough. The sky may not actually fall, but the stock market does and so do telephone poles, trees and houses whether you read about it or not.
In fact I think the press has been talking up the economy for far too long, not to mention the Bush Administration and Bush himself who rhapsodized about his optimism just last week. A hundred point gain after a 600 point drop in the Dow is always announced as a "rebound" and the word Recession has as rarely been heard as a discouraging word. But it has nothing to do with Bloomberg looking for ratings that several European economists I know have been warning me that the creek we seem to be up would soon require the paddle we seem to be missing and not only Greenspan and Bernanke but George the Decider seem to be desperately seeking some way to boost an economy that was supposed to be wildly prosperous after 7 years of profligate spending, wanton borrowing and what has amounted to a tax holiday for major corporations and the very rich. What was supposed to trickle down has trickled overseas.
We're not going to get an admission of culpability here, just a breathless plea for more tax cuts that should give the average family enough extra cash to delay foreclosure for a week or two while the borrowing and spending go on and on and Bush looks to open a third front in his mindless and Quixotic crusade.
"I have a list of economists here who tell us the Dow will close higher at the end of 2008 than at the end of 2007," said the speaker. Who knows? But I'll bet most of those prognosticators are working for a living rather than lounging on their yachts, and if it does prove accurate, will we actually be better off? Will foreigners own more of our corporations and banks and bonds and real estate and other assets? Will General Motors be General Tso a year from now? Will milk be $122 a gallon?
The Dow is hardly indicative of the health of our economy or the wealth of our nation or even the prosperity of our citizens. How many of us are better off now than we were in 1998? Don't all raise your hands at once.
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2 comments:
I've never understood how the press has managed to convince people that the activity of the stock market has anything to do with the health of the overall economy.
But of course, they are only talking about the healthy of the economy vis-a-vis a handful of people reaping the windfalls of all the wanton borrowing and reckless policies you describe.
And with a weak dollar, foreign investment plays a strong role.
Somehow we're more concerned about the Mexicans picking our fruit for less than minimum wages than about everyone else buying our assets at a discount.
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