It is dangerous to read too much into any single day’s move in the stock market, but today’s nearly 400 point drop is too significant not to link to the passage of the “so called” stimulus package or Geitner’s failure to restore confidence to our banking system.
Obama ran against the “politics of fear”, yet it was his threat of a catastrophe if this bill was not passed that powered it though. The few Republicans who supported this bill seemed to admit that some sort of ‘significant’ spending or deficit proposal was needed, but I am doubting even that.
Bush signed the $100 billion Economic Stimulus Act in February of 2008, but this was misguided and very ineffective. Then in September Congress passed the TARP program of over $700 billion claiming just as Obama is claiming now that we faced catastrophic results if the bill did not pass.
In both cases the markets continued to tank and the unemployment continued to rise.
In each case I recalled louder and louder James Madison’s quote, “A crisis is the rallying cry of the tyrant.”
It is time to slow down and get a better diagnosis before we treat the disease. If this newest urgent response does not work, then we are in for a true catastrophe.
Our financial crisis is certainly substantive, but it is also a crisis of confidence. The Wall Street, Banking, and Housing sectors have lost the confidence of the American people. In desperation the Americans have turned to the government for the solution. If the government loses the confidence then the people will lose all hope, ironic given President Obama’s campaign.
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