Brad DeLong writes As Paul Krugman Says, the Stock Market Is Not the Big Problem. "The global market economy continues to evade all our attempts to make it foolproof—in large part because our greater fools are so ingenious. But there is not yet any requirement that this global economic downturn reach the magnitude of 1982, or even 1975."
And I liked this previously unforseen event: "In an ideal world, Richard Cheney would resign, George W. Bush would appoint Barack Obama vice president, George W. Bush would then resign, and President Barack Obama would recall the congress to set it to work. We don't live in an ideal world. In a less-ideal world, this would happen on November 5. I don't think we live in a less-ideal world. But we should do what we can."
5 comments:
My hope is, since the fluctuations in stock and commodities markets has been largely emotional (it's not like the INTRINSIC value of GM and Toyota and oil and corn have changed in the last 10 days, after all) then the emotional relief of knowing we won't have Gramps and the Bride of Chucky hanging moose skulls in the Lincoln bedroom will hopefully buoy the markets around the world.
I think the global financial unrest may be the fear (conscious or not) that the US may not wake up from its 8-year neocon nightmare and return sanity to our Executive Branch. If McCain gets in there to deregulate healthcare and get bin Laden (because he knows how, he told us so!)
Fragment alert! That's what I get for answering the phone in mid-paragraph. I was saying that if McCain gets into office and brings W's more-evil female doppelganger with him, I think the markets will stay in the toilet.
Well what's "intrinsic"? It's what people are willing to pay. Because of the mortgage mess, banks don't know what they are worth, can't lend because they are too leveraged, which means businesses and people are really tight for cash and are not buying or are losing their jobs. The avg american has been living on credit and it's gone now. The retired (not me the real retired) are hit harder and spend less, spiral, spiral.
My other understanding is that markets most dislike uncertainty. Obama and McCain will do different things but once we pick one, the market can react to that. It might not matter who wins, in that respect.
When (not if) Obama wins I'll be glad he has a couple of months to both personally rejuvenate and reorganize his team from campaign to governing mode. Unfortunately, I suspect that the Bush administration will be actively and misguidedly trying to derail any attempt at a smooth transition. Hopefully, I'm just paranoid.
Like removing the W's from the keyboards? :)
I suspect the Cheney-like secrecy will be widespread, to prevent information of mismanagement or worse from being seen by the next administration. Or just that the current people are so inept they don't even realize how badly they are currently doing their jobs.
Then again I suspect it will take some time before Obama's administration will be good at their jobs. Most dems haven't been in these positions in 8 years. Remember the first few years of the West Wing? They sucked at their jobs. At least he'll have a friendly Congress.
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