Steven Calabresi, co-founder of the Federalist Society, doesn’t bill himself as an economic guru but he puts in perspective, far better than most of the punditocracy, what crash in the markets means to most Americans:
The Dow has dropped from the 14,000 range to the 6,000 range destroying an enormous amount of social wealth along the way. More than 50% of Americans own stock many in retirement accounts or in savings accounts to send their children to college. These folks have already lost 60% of their savings and the Obama Administration is only some 40 days old.
Now, to be fair, the Dow was already at 9,600 on Election Day but this grim reality is a fact of life that affects every retiree, everyone with a 401K, and everyone planning on sending their kids to college in the next decade. Or, as someone who does make his living in the markets, Jim Cramer put it:
Until the Obama administration starts listening, until they start paying attention to what you’re watching, to the stock market, until they realize that their agenda is destroying the life savings of millions of Americans, then all I can give you is caution. … I just want some sign that Obama realizes the market is totally falling apart. And that his agenda has a big hand in that happening.
So it gives one pause when Obama makes a bizarrely out-of-touch comment — a sort of “let them eat cake” attitude — like this:
What I’m looking at is not the day-to-day gyrations of the stock market, but the long-term ability for the United States and the entire world economy to regain its footing. And, you know, the stock market is sort of like a tracking poll in politics. You know, it bobs up and down day to day. And if you spend all your time worrying about that, then you’re probably going to get the long-term strategy wrong.
To be clear: there is no bobbing here. It is sinking like a stone. And unlike polls the markets are “real” in the sense that they are tied to real money, real earnings, and real economic behavior. His glib wave of the hand — too busy to worry about the market because he’s busy remaking society — is the perfect example of precisely what this administration is getting wrong. Unless the administration starts focusing on the wealth destruction underway now, there won’t be much of the American economy left to reinvent. Nor will there be many voters left to support a president who’s not all that interested in the destruction of their life-savings.