Forgive And Forget - It's Economical

I recently got into a heated discussion with an Obama supporter (I won't call him a "Liberal" or a "Democrat" because this person does not believe in these labels) wherein he called me unchristian, hateful, and a slew of other words for intimating that the recent stock market crash could be connected with Obama's election. So we'll just call him an "Obama supporter" herein defined as one who voted for Obama.

To begin with, a brief examination at some of the facts which upset my (former?) friend and collègue. First off, the market has been less volitile in the past two weeks than at any point since the Sept 15 crash. Secondly, as McCain's numbers increased in the polls over the past month, the DOW Jones, especially these past two weeks, has outperformed itself compared with it's performance this quarter since the crash, and it has stabalized.

This brings us to election night.

Then we are faced with a whole new slew of facts: the stock market hates itself more than a teenage girl with bad skin and no friends. Even though October is the moth for slumps and slopes, and the market always squirms after an election, this post - election drop is worse than any post-election drop in the past 100 years. In fact, the stock market has not such a bad two-day slum since 1987. The market immediately began its downward spiral Wednesday morning as soon as the bell on the floor tolled. In fact, DOW overnight futures tanked Tuesday evening post-election projections in Obama's favour (only minutes after pundits declared McCain had lost Ohio). I think it's safe to say, the honeymoon is OVER.

This is the magic place where pundits and personalities on both sides of the aisle get distracted. It's really easy to start playing the blame game. The market's fall is of course connected to other market indicators like employment and interest rates to be sure or the impacts of the bailout plan. We could point to the housing market's crash as the reason for crash. Although Democrats and the Left were able to fool most of America, once again let me point out you can't fool the invisible hand.Well, who's fault was that?? While the left is quick to blame the Bush administration, I would like to humbly submit for consideration the FACTS surrouding the creation and indemnification of Fannie Mae and Fannie Mac - just in case you weren't watching the one foreign news outlet that reported on it. It was Pelosi and Company who first decided it would be a grand idea to give loans to people who can't even afford the landscaping costs on the houses they wanted to buy (see other posts about the Housing Collapse for more). But, it would also have to be admitted that some Republicans who apparently show no concern for the concepts of fiscal conservatism were all on board for the buy-out. And, instead of letting the companies go bankrupt and letting the market self-correct, Bush also, didn't veto it.

At the end of the day though, I'm not sure it really matters who's fault it is now that the election is OVER. What DOES matter is what we are going to do about it. The undeniable facts are the market is unhappy with the results. The market isn't rascist and certainly isn't careless. So what are we to draw from such actions? Well, the market is a forward-looking entity based on the perceptions of investors and the financial sector. So, in looking at a possible (albiet far-fetched) McCain victory, it goes up. Now, looking at a sure Obama Presidency, it plummets with no end in sight. If Obama and his supporters truly mean what they touted in the streets of Chicago and the airwaves of LA, and on the facebook walls of millions, then CHANGE is the answer - bipartisanship is key. How might such a change play out? Well, for starters, it might begin by recognizing that it is at this point irrelevant if McCain's ideas were better or worse for the economy or if Bush did or did not support the bailout or even the original idea that led to the housing crisis. Maybe the best we can come up with is to agree that Obama will be no better for the economy (but no worse) than John McCain.

This economic crisis is clearly linkd to more government intervention in the economy than we've had since the Great Depression. Democrats had the idea, Republicans got greedy and abandoned their principles: it's everyone's fault. What matters now is what are we going to do about it? We have to recognize, for better or for worse, that the market is not responding well to what it forsees as the most probably outcome of Obama's election. I think it's a reasonable to request as an American that Obama and his proponents consider the impact that just the anticipation of his economic policies are having on our market place. If party affiliation truly doesn't matter (although I can't help but point out that historically the stock market loses 1% when a Dem wins, but gains 4% when a Republican wins), than it shouldn't matter who sided with Adam Smith first, it only matters that the facts are showing "share the wealth" isn't jiving well with the invisible hand.

To paraphrase Lewis Black, we have to get to a point in the country where we can all see something happen, and agree on what we just saw. If we watch a videotape where Bush is being told about Hurricane Katrina, we are all going to have to agree that the FACTS show Bush was told about Hurricane Katrina. Similarly, we cannot watch the market crash and pretend it didn't. And certainly we cannot think that name calling will make it not be true.

It crashed. That's not offensive - terrifying maybe, but not offensive. What is offensive is a disregard for the integrity of the rational.