Market tanks, Republicans say ‘thanks’

Tuesday’s stock market decline clearly caused some anxiety among investors and those who monitor the financial markets, and leave it Fox News to step in to exploit that anxiety to advance a Republican agenda.

[Yesterday] on Your World w/Neil Cavuto, substitute host David Asman aired three segments linking [Tuesday’s] plunge in the Dow to either making George Bush’s tax cuts permanent, or cutting taxes even more. The most in-depth explanation the audience got as to how or why the two go hand-in-hand was when Asman introduced his first pro-tax cut guest, Sam Brownback (R-KS): “Tuesday’s 416 point plunge by the Dow is putting a spotlight on our economy and what it needs to keep it humming. My next guest says, even more tax cuts!”

Brownback and Asman talked about cutting taxes for a few minutes…. A few minutes later Jack Kemp came on…. He said, “Bad policies cause recessions, raising taxes doesn’t.” He said, “most Republicans today understand that lower tax rates means a bigger pie, a bigger economy, and more revenue, not less. … Lowering the rate…would add to the efficiency of our economy and keep this growth cycle going well into the next decade.”

Another few minutes later (these segments were evenly spaced throughout the hour), Edward Lazear of the Council of Economic Advisors came on. Lazear was ostensibly going to talk about the “White House reaction to stock market swings,” but that didn’t come up. Instead, Asman wondered about, “people who say tax cuts were instrumental to the strength of the economy and indeed it has helped fuel this economy and revenues coming in” who say we need to make the tax cuts permanent before Bush leaves office. Lazear said he hoped they would be made permanent before then but if not, hopefully the “next administration will, in its wisdom, see that the tax cuts were very good for the economy.”

Fox News sure is efficient, isn’t it? Within 24 hours of a stock market plunge, “Your World” has assembled multiple segments with several conservatives, all of whom — surprise, surprise — believe tax cuts are the answer to every possible problem.

I don’t suppose it’s occurred to them that Clinton raised taxes and saw the economy produce far stronger economic growth, far more job jobs, and far more stock market growth than Bush could even hope for.

It also may not have occurred to them Tuesday’s market plunge had nothing to do with U.S. tax rates. Alas, it hasn’t occurred to far-right lawmakers in Congress, either.

Consider the inanity coming from Rep. Louie Gohmert (R-Texas) yesterday.

[O]n the House floor, Rep. Louie Gohmert (R-TX) blamed yesterday’s market drop — the largest since the September 11 terrorist attacks — on members of Congress supposedly “talking about…more regulation” and “undermin[ing] the President’s national security policy.”

Gohmert said, “In two months of talking about raising taxes and more regulation and [referring to Murtha] one committee chairman talking about how he’s going to undermine the President’s national security policy — two months! — we have this terrible damage to the stock market, to the economy. Unbelievable.” He added: “I just encourage my friends across the aisle, be careful. We built a great economy. Don’t blow it quite so quickly.”

I really should know better, but I just find it hard to believe how dumb a member of Congress can be, and how willing that member can be to put his idiocy on display for everyone to see.

“Unbelievable,” indeed.

“I don’t suppose it’s occurred to them that Clinton raised taxes and saw the economy produce far stronger economic growth, far more job jobs, and far more stock market growth than Bush could even hope for.”

Or Ronnie Reagan for that matter.

  • Cutting taxes is the new age Con’s solution to everything. Bad market? Cut Taxes. High Unemployment? Cut Taxes. Housing bubble? Hey, cut taxes! High deficits? Come on! Cut Taxes!

    Of course the market drop had “Nothing” to with plunging auto sales and popping housing prices in some of America’s hottest real estate bubbles, uh, markets.

    The new age Cons should remember that what they want (a laisse faire Ayn Rand Wet Dream) went on in a country noted for being a bunch of surrender monkeys till the populace said Cut Heads instead of Taxes.

  • The market drop is way more connected to technical market forces than the condition of the economy. Regardless – making already existing tax cuts “permanent” would have nothing to do with it – people aren’t selling stocks now because the estate tax will go back into effect 4 years from now. Jeeeze…

  • “I just encourage my friends across the aisle, be careful. We built a great economy. Don’t blow it quite so quickly.”

    he’s kidding right? a great economy for the very rich maybe. ask us “ordinary” folks how much harder it is to pay our bills today than it was six years ago. or for a more telling story, ask a low income person how much better off he is today.

    where do they come up with this crap?

  • Phased in tax cuts CAUSE recessions. Or at least it did in the early 80’s and the early 2000’s.

    Raising rates in 82, 90 and 94 didn’t hurt the stock market.

    However, nothing in US fiscal policy changed since last week so US fiscal policy didn’t cause the markets to move.

    Remember that if everyone looks at this decline as a buying opportunity then the market MUST decline further.

    It is a fact that the more bullish everyone is the worse the market will be.

    John Templeton, one of the greatest investors in history, and a very religious Christian, said the time to buy was at the point of maximum pessimism.

    The problem I always have is to recognize when that point occurs.

  • Actually, the REAL irony in this whole deal is that the initial cause appears to be the unfettered marketplace which the republicans champion…

    Basically, the Chinese stock market has been artificially inflated on a massive scale (doubling in ‘value’ in the past year), and the government started mentioning that they might *horrors!* actually step in an *regulate* some of the more questionable practices…

    That collapse triggered the following ones in the European and American stock markets (following the timezones, basically)…

    So, funny thing… misbehaving businessmen manage to f*&^ up my retirement accounts, yet again…

    (and remember, folks, if you keep republicans in charge, they would let all of the same things happen, over and over…)

  • The problem I always have is to recognize when that point occurs.

    I don’t know how closely you follow the market – or if you know things like technicals and Japanese Candlesticks. But an indication of a market turnaround is to watch for is a day on very heavy volume where a significant low is reached on a day that lower than the day before and the high is higher than the day before and the close is near the high (Candlestick terminology – “Bullish engulfing day”)

    For example – the last major market turnaround occurred in Oct 2002 – the bottom of 2000-2001 market crash. On Oct 9, the high was 7500 – the low was 7282. The next day – the turnaround – the low was 7197 – but the high was 7560 and the close was 7533 on heavy volume. If you were watching during the day, you would have bought as soon as it passed 7500 on it’s way back up from 7197. But waiting for the next day wouldn’t have hurt you either – you still would have gotten in at the bottom.

    Another indicator of major market shifts is called the “90/10” rule – if, on any day, the total number of shares traded in any one direction (up or down) is more than 90% of the total number of shares traded that day – that indicates a major market shift in that direction. Days like this only happen maybe once a year max (and often rarer than that). On Tuesday, the total down volume of stocks traded on the NYSE was 98% of the total. You can draw your own conclusions.

  • Given the connection between these large drops in the US markets and China’s formative stock market, I’m concerned with the Chinese lack of sophistication with stocks. Since the Chinese have never had a great stock market crash and a run on the market like the US did in the 30’s, are our markets now tied to a market that may be unnecessarily volatile because former communists don’t quite understand how to invest?

  • Given the answer to all problems is always “Tax Cuts”, suppose conservatives were to continually cut taxes and tax rates are eventually driven to 0%. How the heck are these people planning to pay for anything? I know some libertarians in fact regard this is a goal, but most concede they would still want defense spending, congress, corporate giveaways….

  • “… I just find it hard to believe how dumb a member of Congress can be….”

    Add to that the fact that virtually all members of Congress are liars and thieves and you begin to wonder what Mark Twain would today call the institution he dubbed our National Aslum for the Insane.

  • Hmm, let’s see now, stock market reflecting two months of unbelievable damage to the economy, OK, here we go:

    S&P 500 on Nov 6, 2006, day before the Dems retook Congress: 1379.78
    S&P 500 on Jan 3, 2007, day Dem Congress formally started: 1416.60
    S&P 500 on Feb 26, 2007: 1449.37
    S&P 500 at this moment: 1401.25

    So, either the market discovered some evidence of terrible damage to the economy in a space of a few hours on Tuesday that they had been steadfastly ignoring for two (or even four) months until then, or Cong Gohmert is a blithering idiot on the level of Edgar J. Steele. I know which way I’d bet.

  • I read on businessweek yesterday that Q4 growth rate was a sluggish 2.2% (revised down from 3.5%)…

    So what’s Cavuto’s solution? Dare to bet more tax cuts for the rich?

    I shudder to think this guy is spearheading the launch of a new 24-hour channel. Unbelieveable.

  • Just bill asks: “where do they come up with this crap?”

    See “Nero’s Favorite Old Standards”, sheet music for Rethuglican dreamers.

  • Many of the politicians are behaving like anti nationals- Not for the betterment for the country men or for the world at large.

  • Take advantage of these major market moves by working with Forex. I have been trading for years and have never seen this much excitement. Take a look at metatrader, it a professional trading platform with a demo. Thanks, Maggie.

  • Comments are closed.