The stock market won’t serve as a crystal ball. How about a Magic 8‑Ball?
I’ve never asked “the stock market” for advice. But millions of people trade stocks. Their actions are presumably reflective of their judgments … some sober and rational, others panicky and irrational.
Often there’s no way to tell. But note how, in the push for ever-more government intervention in the economy, traders are said to be dull-witted if they don’t respond with exuberant glee to bailout news. They are thought smart only if they buy, buy, buy when government repeats the same mistakes that got us into this easy-credit-slathered mess to begin with.
Banks fail. Stocks decline. More banks fail. Stocks decline. Government announces a trillion-dollar bailout. Stocks rise.
Then there’s trouble passing the bailout in Congress. The stock market dives hundreds of points!
Oh no! Obviously, we “need” the bailout! So there’s arm-twisting, pork-larding, another hundred billion in taxpayer dollars added to the biggest one-day mortgaging of children’s future ever. Finally, the bailout passes.
And stocks dive even harder! Huh? The capitalists were supposed to be ecstatic about the feast of a free lunch. Therefore, the market must have fallen “despite” — not “because of” — the giant hit taxpayers are taking.
Some science, where 20/20 hindsight imputes particular reasons to a process filled with conflicting reasons.
Me, I’m going to take up tea leaves.
This is Common Sense. I’m Paul Jacob.