The short answer is when people perceive that the government can be trusted. The polls say, "It's Obama", the market says, "Oh no!" Confidence is needed but Obama does not make business investors comfortable, and there are very good reasons for that.
This current problem was caused by government policy distorting the market by creating customers that should not have been there. Capitalism is very good at making things, in this case houses. The builders said that if there would be customers to buy their houses, we will build them. The banks said if the government is backing the loans, we will give them. Investment companies said if we have loans to sell, we will package them and sell them.
An Obama win means more government distortion of the market with a weak economy and a broke government. A community organizer needs money, lots of it, and government power. That money needs to come from somewhere, either tax increases (letting the Bush tax cut die), printing more money, or borrowing from someone else (at a higher rate). Any of those choices will make it tougher on business. Hence the stock market falls.
I think, that even at this late date, it will still be a landslide for McCain when people connect the dots.
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3 comments:
We can only hope that "landslide" is a word used to describe the McCain win on Nov 4th. My wife is hoping for rain, sleet, or snow that day. She says liberals don't care enough to vote when it is "difficult". She also wants to dip her finger into purple ink after voting.
We can only hope that there will be at least one flesh and blood soul to keep these socialist from dragging us over the cliff. If it turns out to be just the rocks at the bottom that slow their agenda it could be very painful for the rest of us. Of course, some people kind of hope that there is no Republican conservative in sight so that they will have no one to blame but themselves. But as the Fannie and Freddie scandal has illustrated, we should have focused on teaching economics instead of sex ed in school. Then a few more would get it.
Purple ink, a sign of defiance, I'll buy that!
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