The cause of yesterday’s massive stock market plunge remains a mystery and Congress is preparing to hold hearings to find out ….something. I’m glad Congress is trying to determine what happened but, after watching the dim witted line of questioning during last week’s Goldman Sachs hearings, there may not be much to get excited about. But the volatility in this nation’s capital markets is something to be very concerned about and when it threatens to destroy individual wealth in a matter of minutes even liberals show concern about viable markets and private sector wealth. Yesterday’s panic was a vivid illustration of Samuel Johnson’s famous phrase that nothing focuses the mind like a hanging. That’s probably what was on uber liberal Robert Reich’s mind today. Reich, a liberal’s liberal if there ever was one, said something today at the HuffPo that was spot on:
Regardless of why it happened ( the crash), it’s further evidence that the nation’s and the world’s capital markets have become a vast out-of-control casino in which fortunes can be made or lost in an instant — which would be fine except for the fact that most of us have put our life savings there.
What? Is Mr. Reich admitting that our economic future, our retirements and savings (and his), depend upon the profitability and the share price of Exxon? Proctor & Gamble? General Electric? Halliburton?? This was one of those rare moments when a liberal admits the vital importance of a healthy and robust private sector that is the foundation of everyone’s life savings. Hopefully the New York Stock Exchange, the SEC and, more importantly, the companies whose shares are listed on these exchanges and trade publicly, will work to make sure violent price swings like this do not occur again. But the lesson to take away from Reich’s statement is his admission that private sector corporations are the linchpin of the American economy (hopefully President Obama was listening). If Reich is so concerned about the safety of his life savings (savings that he admits are invested in these companies) then why does he and his fellow travelers promote policies that drain wealth from these companies? It is this enigma (or fool’s hypocrisy) that has defined the debate between liberalism and conservatism for decades.
Ann Coulter was excoriated when she offered up the fact that liberal’s public policy positions contradicted the way they conduct their own private financial affairs. Liberal politicians (with a few exceptions) don’t routinely spend more than they earn when it comes to their family finances. So why do they promote public policy that it so at odds with their own personal financial behavior? The scenes from Greece are a vivid example of what happens when citizens finally become convinced they have been ruined financially and the promises of their government are meaningless. The U S is a long way from the problems Greece is experiencing for only two reasons: we possess the most powerful millitary in the world and our currency maintains reserve currency status. It would be much more comforting if the U S could add fiscal responsibility to that meager list of differences with the PIIGS.