Last evening was a "travel night" for me. I was on my way to Nashville and had some downtime in Baltimore waiting for a connecting flight. CNN programing was playing on the various flat screens positioned in the waiting areas.Much of the coverage was devoted to the equity "market carnage" from earlier in the day.
It sure was an ugly day in the markets. What amazed me as I sat watching and listening to the talking heads was the constant call for the government, whether that be the White House, Congress or the Fed to "do something". Where did this faith in these authority figures come from. The fact of the matter is that these guys have no answers. We have been extremely fortunate in the US to be able to live well beyond our means over the past 20 years or so. That ability has come to an end and we are going to have to learn live with less. I know that is not a message that politicians want to deliver but it's the truth.
At the same time while we are looking at real unemployment of close to 20% (U6) it's amazing how a 10-15% pullback in equity prices brings out the cry of do something. If we can spend $ to support stock prices why can't we take the same approach to dealing with jobs?