DOW Down 700 Points
The DOW was down 700 points for much of today. When was it ever this bad, before?
Well, let’s see. I can remember the 25% crash back in the 80s. Before that, I don’t think it was ever this bad since the Great Depression.
What do these three disasters have in common? Any guesses?
I’ll tell you. But, if I just come out and say what it is, half of us will refuse to believe it because it might mean they’ve been betting on the wrong team for so long we don’t know how to be reasonable any longer. But, here goes…
Let’s look at the Great Depression of the 1930s. We all know what got us out of it. There were endless bottom-up works programs to employee everyone. There was tax relief for the middle class (the lower class didn’t pay much in taxes). There was a minimum wage — a living minimum wage, which we haven’t had since the 80s.
Plus, some would argue that WWW II did a lot to bring us out of the dumps. However, this is quite questionable as it didn’t help other countries in the war, but we’ll leave that debate for another day.
And, one more avenue of change was in the arena of regulation. To get us out of the depression, our government finally realized they needed to implement considerably better regulation. And, that’s exactly what they did, and that’s exactly what helped bring the prosperity for the next 70 years.
For anyone interested in looking it up, there was also a free-market government in America at the runup to and during the first few years of the depression. These same people who had let business run amuck were falling all over themselves to give big incentives to big businesses to shore up the economy.
Just like today, the stimulus did nothing but deplete our government’s coffers when the money was sorely needed for other programs. This same foolish mistake did just as little good then as it’s going to do now. 700 points in the hole the day after the big-business government put together the fat-cat welfare program.
Fast forward to the crash of 1987. Does anyone remember what caused it? It was the Savings and Loan collapse. You remember, the Keating 5? Who were they? They were the Free Market (ala used car) salesmen. They pushed for and got considerable freedoms from the required regulations monitoring their industry. With the market free, the crooks were free to pursue really stupid and greedy agendas.
So, America made the mistake of relaxing regulations (getting the government off their backs in their words) and the industry crashed and we, you and I, spent billions to clean up after them too.
And, we’ve been hearing the drumbeat of free-market, “get the government off our backs” conservatives since Reagan and we’ve been gradually loosening regulation after regulation until 1999 when we dropped the last of the meaningful regulations. And, now, here we are again. Is it really any surprise?
What have all these had in common? Free markets and get the government off our backs. When will we finally learn, America? Free markets don’t work unless we are in there regulating them. Plain and simple.