“Dow Plunges 530 Points.”
Whose fault is it this time?
The last time it happened, the established “wisdom” went as follows:
The market crashed because of capitalism.
False. We’re not a capitalist economy. We’re a mixed economy, i.e., a mixture of socialist controls and private markets. Major sectors of the economy — education, health care, the financial industry — are heavily managed by the federal government, almost to the point of total control. This was very much true when George W. Bush was in office, and it’s even more true now.
If less capitalism is the solution for a more stable, vigorous and healthy economy — why is the stock market crashing now?
The government did not spend enough.
George W. Bush and the Republicans in Congress spent as much, if not more, on domestic spending as the most liberal of Democratic administrations and Congresses in the past. They expanded Medicare and education spending to record levels. Their spending seems “conservative” only when compared to the Obama administration and Republican Congress who followed, breaking all records for spending (and debt accumulation) in the entire history of the country (human history, as well.)
If more spending is the answer, then why the problems now?
The government did not regulate enough.
Under Bush and his Republican Congress, the government passed unprecedented regulatory measures such as Sarbanes-Oxley. Since Obama came to office, regulation has increased almost exponentially.
If regulation is the answer, then why are we having problems now? There’s almost nothing left to regulate. What else can the government do?
Bush lowered taxes.
This is true. However, taxes have risen again under Obama. Markets are prepared for them to go higher. If taxing the wealthy is so healthy for the economy, why the drop in the stock market now?
This quote reflects the opinion of many economists and Wall Street observers, at the moment:
“Investors are wondering if growth isn’t coming from the U.S. or China, where is it going to come from?” said Tim Courtney, CIO of Exencial Wealth Advisors. “This is about growth.”
Here’s my question:
How did we get to the point that the world economy is as dependent on growth from the Chinese, fascist economy as it is on the United States?
China is not a free economy. It has loosened some of the chains on its citizens compared to the totalitarian years of Mao; but that’s really not saying much.
The United States, on the other hand, has moved steadily — and particularly since Obama — in the direction of a super-heavily taxed, super-regulated semi-fascist economy, based as much or more on government control as it is on free markets, profits, entrepreneurship and all the other things most Americans mistakenly think still comprise the essence of our economy.
Is the stock market trying to tell us something? If so, what?
It sure doesn’t sound like it’s saying: “Give us more socialism, more taxes, more regulations.” If those were what we needed, America would now be the most prosperous and growing economy in human history.
I’m waiting to see if Obama’s policies and ideas get any of the blame for what happened, and whatever else might yet happen. I’m sure not holding my breath.
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