Just Relax it's only the Stock Market

As you have probably heard, the stock market plummeted today, losing another 634 points and finishing under 11,000 for the first time in a while.

I'm not going to spend a lot of time discussing what almost every talking head and political pundit has been saying for the last 24 hours or so. We all can tell that people are freaked out-- and they have every right to be. No one, not even the government, the ratings agencies, or the commercial banks know what's going on with the global economy. Everywhere you turn you see nothing but bad news; and it seems to grow with each day.

But you shouldn't be alarmed, and here's why:

The United States' economy is the best in the world. It sets the benchmark for interest rates and it is the benchmark for trading financial assets. And what we have seen is the United States finally looking into the mirror and seeing itself for what it really is: a mix of high unemployment and debt with a hint of political gridlock and huge corporate profits. When you do the numbers and add in a the secret ingredient-- your own tax dollars!-- it turns out to be not so bad. Even decent by some standards.

After the recession technically ended, this is what our economy looked like. The DOW and S&P were climbing, unemployment was slightly falling, and we were spending money like it was our job. This works in the short term, but our government failed to provide any long term solution to our debt problem and we continued to kick it down the field, hoping that someday a grand solution will present itself to us in the form of an floor-ready House Resolution.

And so it went, our country slowly trucking along, one job or mortgage payment at a time. But then a group showed up and demanded the economy to get better. They called themselves the Tea Party because the caffeine in tea was supposed to stimulate the economy-- and cut spending and promote morals or something of that nature. And this group became pretty successful, building a large base of support. They even managed to propel some of their candidates into Washington with the mandate to cut spending and balance the budget.

Wait, what? Why? Who are you and what are you talking about? Do you not realize that we are still trying to emerge from an enormous recession? Do you understand how fragile this recovery is?

Or better yet: Where were you ten years ago when we started borrowing money at an unprecedented rate to fund two wars in nations that we had no business entering?

Obviously, no they didn't understand much. And they still don't.

So now we find ourselves once again with our eyes glued to the television with fears about the next day of trading, hoping we don't kill our savings or ourselves in the process. And once again we find ourselves pointing our fingers at any and everyone. I did it.

But the market will rally. People will start buying (sooner rather than later if you are smart). Our economy is not as bad as it was in 2008. Firms have MONEY. Companies are making awesome products. We are constantly coming up with technological advances. Most jobs and households are not even affected (at least immediately) by any of the things that have occurred within the past few weeks-- falling DOW, budget cuts, euro-fail, Asian currency trouble, China's pissy nature. The main concern here is the mere fact that EVERYONE else is concerned. Everyone is scared that their portfolios will deteriorate and that they don't have enough safe assets. So they sell and put their money is low risk locations like underneath the mattress or is a metal suitcase in the back seat of the Dude's car (I hope someone gets that reference). Once the markets calm down in about two or three days, we will see that there is hope in sight. We just have to do everything we can to make sure that there are as few uncertainties and externalities in the market as possible (specifics on this will come soon)

 The only real problem that we are facing now is getting people back to work in a country that just doesn't have the quantity of lower skill level jobs that it needs to be as healthy as it used to be. We also have a piss pour housing market which generally leads recoveries. But that will only come if people start getting back into long term employment situations. We can solve that problem. The question not as much how we will as it is who can.

I'd like to hear who you have to blame for this mess. And, I'll leave you with this: In order for the United States to return to pre-recession levels, should we just cut spending to the 2006 budget and maintain the economic and domestic policies of Bush?