September 17, 2008, And for our next trick...
While John McCain, listening to advice from his economic advisors he'd be better served to ignore (if not take out and shoot) tells us "the fundamentals of the economy are strong" and other self-evident piffle... reality has set in, and the market has not accepted that the nationalization of insurance giant AIG will solve the financial market's woes... and the Dow Industrial Average fell nearly 450 points more today. Among other attributes of the 449 point decline is that Morgan Stanley (whose shares fell by around 25%) is talking about a merger with Wachovia, and other institutions are talking about buying up Washington Mutual.
When the dust settles, lenders will stop lending, businesses will stop expanding, people will lose their jobs and both individuals and businesses will default on their loans, causing further tightening in lending, lather, rinse, repeat. We are only at the front end of this cycle now, which will in turn impact other businesses, not to mention tax revenues for all levels of government at a time they are starting with budgetary problems (including already record federal deficits thanks to insanely stupid non-stimulative tax cuts for the super-rich).
All told, while the nearly 900 point drop this week (btw, the DJIA included AIG as a component stock, IIRC... that will have to change...) is spectacular, it's around 8% of market value, well below financial-bloodbaths-past. Of course, we're not done yet. And of course, the market started this decline at levels well under the level (Dow of around 11,700) when Dubya took office.
So... while there has been a massive shin-dig to which none of us were invited for which the bill just came due... the benefits of the party have gone neither to workers whose real wages have declined during the last eight years nor even to ordinary investors. Who in their right mind would continue the governance of any party that oversaw such miserable results?
Of course... Barack Obama is still Black. And did I mention that many men believe Sarah Palin is hot? I hear she can see Russia from her house...