Grim news for market watchers:
Stocks fell sharply Tuesday as a steep decline in consumer confidence aggravated growing concern about the global economy and sent the Standard & Poor’s 500-stock index to a new low for the year.
Stocks fell from the start, continuing a trend that had begun overnight in Asia and spread to Europe, driving major indexes in the United States down about 3 percent.
The Conference Board said Tuesday that its consumer confidence index fell this month to 52.9, a decline of nearly 10 points.
That news came after the Standard & Poor’s/Case Shiller index of home prices rose only slightly in April, providing no signs of a sustained recovery in the housing market.
Is there any possibility that a DOW that continues to fall would spook enough blue dogs to get them to support a job creation package?
mcd410x
No.
mellowjohn
and again, no.
Legalize
Nein.
Comrade Colette Collaboratrice
No. More tax cuts are the only solution. They’re so stimulating, you know.
Violet
Nyet.
New Yorker
I’m sorry, what? “Sustained recovery”? First of all, housing tends to be extremely inelastic as far as pricing goes. It’s going to be a while before it “recovers”. Furthermore, define “recovery” for me, please. Does it mean “re-inflated to the unsustainable levels that got us into this mess in the first place”? I get the feeling that many in the media and pretty much everyone in Washington believes that the cure to all of our ills is to simply re-inflate the bubble.
No, there needs to be a structural adjustment to the distorted mess that housing has been for a while.
tony
No, because people like Herseth Sandlin have decided that deficits are more important than jobs. Between now and the election you won’t catch her or any other Blue Dog voting for anything that wouldn’t appear in the Contract for America.
Sly
No. If anything, the austerity freaks will try to spin this into fears of inflation despite all evidence to the contrary.
Batocchio
Nawh, those dumb, mean bastards will just turn to cannibalism.
Brachiator
No.
Especially when you have the GOP doubling down on “all you have to do is cut unemployment compensation and people will get jobs.”
And doubly so when you have bonehead lawmakers pulling stuff like “OK, unemployment insurance extension, but only if they do a drug test” out their butts.
ronathan richardson
The lack of a plan for job creation is blowing my mind right now. Honestly I’d be less mad if Obama stood up and spewed crap about corporate tax cuts and deregulation for business in the hope of making something happen. But if we do nothing, it’ll probably be 2013 before unemployment is below 8% and things are bustling again–is there some inside discussion of a plan–something they know that we don’t? I haven’t heard any serious talk about a second stimulus, and the fed seems totally opposed to devaluing the dollar.
Hugin & Munin
Yes.
j/k. Not a chance in hell.
MattF
A market crash tends to shut up the ‘privatize Social Security’ crowd, but the blue dogs think that unemployment is just the purgatory that has to be suffered through in order to get to Economic Paradise. Since that’s a revealed truth rather than a consequence of any argument, I don’t think stock market gyrations are going to matter.
jl
No, not left to their own devices.
If things get really bad, the blue dogs’ decision will depend on which business lobby can come to them with the most cash.
The lobby most likely to come with most concentrated cash is from finance, so even then, no.
In other words, no unless unemployment stays really bad or starts to get worse, and after that, probably not.
If enough voters get pissed off, then maybe yes. But I don’t think that will happen unless there is a very obvious double dip recession.
Tonal Crow
Shake the Overton Window now: The markets are falling in fear of a double-dip recession.
mr. whipple
No. The only action I can see them taking is extending the home buying credit under pressure from the real estate/construction industries. Even then, they’ll demand some offset.
GregB
Ahem. We all know that wars are great for the economy.
Time for a hat-trick.
Bomb, bomb, bomb, bomb Iran.
Spaghetti Lee
Bah-hah-hah! Those idiots probably think that job creation efforts are the cause of a stock market decline. Nothing the markets hate more than seeing people put back to work.
malraux
@Spaghetti Lee: You laugh, but its a pretty good chance that the blue dogs would argue that increased deficit is what is driving consumer fears. Thus, the answer is cutting spending.
Or tax cuts, cuz that’s always a good solution too.
Zandar
Not just no.
A bunch of “hell no” with a thousand mini-nos orbiting each autonomous hell no unit.
If anything the blue dogs will say “Now is the time to cut government spending to stimulate the economy because that will entice the free market to step in!” You know, because private companies love to do things like build bridges and hire teachers.
Fred Fnord
That was a joke, right?
See, the way you get job creation is, you cut the size of your state governments to zero, and the size of your federal government to ‘the military’. Only then may job creation begin.
-fred
jwb
Not unless all the serious people (r) are spooked. Blue dogs at this point are not the fulcrum.
arguingwithsignposts
The casino is in a funk. Fuck ’em. I, for one, am sick of the ceaseless fascination with the Dow as a proxy for the health of the nation, when the Dow has shown it’s a pretty shitty indicator of what’s going on in the lives of middle class Americans.
Kryptik
Sorry John, but you’re fucking with us, right? Even I’m not that naive to think this will do anything but prompt further ‘CUT THE DEFICIT! KILL THE LEECHES!’ bullshit.
Dave C
So…I’m sort of worried that the the markets are going to tank resulting in major Dem losses in 2010 and 2012, followed by a new Republican administration that manages to not only fail to fix things but actively makes them worse. Actually, I’m worried about that happening even if the GOP doesn’t regain power. Basically, I think our society in the next few decades is pretty much fucked. Am I just being pessimistic?
sukabi
the falling markets are an attempt by the “small people” to cut their personal deficits… see how fabulously it’s working?
Gus
@Dave C: No, you can see it coming miles away.
Bob L
Blue dogs are conservatives, conservatives by the current definition only select for data that support their conclusions. Something as trivial as the stock market and public opinion won’t change the conclusion they already have. So the answer is no.
terry chay
Obviously no. The Republican strategy is that they WANT the economy to fail since that will make them take more seats in the next election.
Just remember the people who are saying this shit have never been unemployed (or have a daddy warbucks when they have been.) They don’t care.
Beyond that, this is a natural reaction to the G20 “deficit balancing” bullshit. Clearly the market isn’t as stupid as Congress.
arguingwithsignposts
Dammit, in moderation. Here’s what I said:
AhabTRuler
@Dave C: No. Now stop being so optimistic.
Bill Section 147
The only thing that will right the market is modifying laws to allow indentured servitude. This country was built by indentured servants, slaves and free market capitalists. Only one of the sides of the Founder’s Triangle still exists and that is why we as a Nation are failing.
That and privatize Social Security.
cleek
oooh…. i hope my 401k invests its monthly allocation today! everything’s on sale!
oh wait.
i don’t have a 401k , because i’m a contractor.
well, at least it’s a job!
for 3 more months, anyway.
fucen tarmal
by the time the blue dogs get on board, it will be after job creation can actually benefit the economy. they simply are a front for “proving”that non-gop solutions won’t work either. thus voters think they are all the same, and decide on “red meat” issues like abortion, gay marriage, guns, god, and glitter.
same as it ever was, same as it ever was
Bill H
Probably just the opposite. They will say that the market is not confident and that to make it confident they have to balance the budget.
maus
Are you nuts?
No. Blue dogs first, country last.
El Cid
@Bill H: Exactly. As Krugman says, if you bleed the patient and he still doesn’t get better, it means you have to bleed them more. Repeat.
bobbo
I don’t see how anyone running for office can believe cutting the deficit is more important than creating jobs. Are they just complete morons? I can’t think of any other explanation.
Bruce (formerly Steve S.)
No, it would be taken as a sign that Obama’s socialist stimulus was a failure and they will double down on the austerity. Not to mention, I personally would lose some money out of my retirement, though I’d gladly sacrifice it in exchange for sane national policy. Since a market crash will not lead to sane policy, though, I’d just as soon a crash didn’t happen.
Davis X. Machina
Immiseration isn’t remotely at the level where voters are ready to abandon the familiar old stories — ‘run the government like a business’, ‘we should balance our checkbook every month’, ‘wastefraudandmismanagement’, ‘young bucks and welfare queens’ — in favor of something unfamiliar, even if it works.
Deficit-mania won’t cost a single congresscritter their seat — not yet.
Mnemosyne
@Spaghetti Lee:
There’s more truth to that than you know. For years, there was nothing like massive layoffs at a company to get Wall Street all excited about your stock. Announcing layoffs was basically a guarantee your stock price would jump a few points because it showed you were “tough” and “could make hard decisions.”
Problem is, that’s the only thing companies know how to do anymore to get a stock bump, so now no one knows what to do when the whole economy sucks.
AhabTRuler
@bobbo:
Politicians are a lagging indicator.
Ruckus
@arguingwithsignposts:
The casino is in a funk. Fuck ‘em. I, for one, am sick of the ceaseless fascination with the Dow as a proxy for the health of the nation, when the Dow has shown it’s a pretty shitty indicator of what’s going on in the lives of
middle class90% of Americans.Fixed for you
Bob Loblaw
Now, now, to be fair, corporate profitability has never been higher. Not even the Reagan years. So we have that going for us.
How exactly corporate profits are at record levels during a demand-side recession and why isn’t that a massive structural problem for the economy are problem two questions the Obama administration isn’t interested in answering right now. Right in between asking themselves why they wanted their jobs so frickin’ badly in the first place…
Uloborus
@ronathan richardson:
Dunno. Obama just pushed for a second round of stimulus at the G20, but I don’t know any details.
@Bill Section 147:
Hi, BoB!
Actually, I think it’s someone spoofing Bo- wasn’t BoB a spoof to begi-
My head hurts now.
John O
No. SATSQ and all.
Svensker
@MattF:
Well, Boehner’s new plan is to raise the retirement age to 70 in order to pay for the wars. He said that. Fucking fuckers.
Gretchen D
Krugman has a really scary column in the NYT today about this very question. It’s called the Third Depression!
mvr
I wish! But I doubt it.
To the extent one reads anything into market reactions it looks like a reaction to the G20 as much as anything else, and to that extent maybe a few folks will be moved. But they won’t be “centrists”, I fear.
So here’s a plan. Since tough times require tough measure and that means high unemployment is a good thing, why don’t all of us with jobs quit? It the theory is right, that should be great for the economy. Ok, there is that problem . . . this only works if the theory is right.
Silver Owl
I’m not buying from f*cked up rich white dudes and their blond dudettes. I’m definitely not buying from any thing today’s republican support. Give me local businesses wanting to make an honest living I am there.
If I want shit I can get it from my own toilet. Not corporate america as it stands today and definitely not from our anything our ivory tower prima donna “conservative” senators think their johns want.
mclaren
@John Cole:
Nahhh. When the economy collapses, we need to cut our budget and get our ducks in order to eliminate any of those nasty deficits. It’s basic economics, exactly what Herbert Hoover showed us in 1930…
fucen tarmal
@Silver Owl:
when american standard and eljer are laying people off it brings a whole recursive element to getting shitcanned.
bob h
If the Dow falls as FinReg stalls, that is probably a good message from the markets.
Rainy Day
YES!!!!
If you don’t have a middle class base to rent your condos, eat at your restaurants, shop in your stores, use your services, etc., all you have are your deficit talking points and your dividends.
If you lose your dividends, too, all you have are your deficit talking points.
Most states are already is serious financial trouble. Those relying on tourism in the Gulf area are suffering even more. This means education is going to take an even bigger hit, resulting in a lot of mad mamas. If states raise the sales tax (yet again), that will result in more desperate retail biz owners.
I think suffering wealthy property owners, retail proprietors and mad mamas will create a powerful job-creation lobby.
And, I think it will happen prior to October 30.
Glen Tomkins
“Is there any possibility that a DOW that continues to fall would spook enough blue dogs to get them to support a job creation package?”
No.
Anybody who puts any credence whatsoever in the Hooverite, austerity, approach to the current depression, would see the market drop as confirming their belief that market confidence is the key to recovery, and deficit spending is the key negative pressure on market confidence.
It’s a self-sealing delusion. There are people who believe the Hooverite nonsense even when there is no evidence of a lack of confidence in the markets. Nothing that could possibly happen, either a continued lack of evidence of unconfident markets, or the developement of any signs that could be attributed to market lack of confidence, could possibly change that opinion.
The Blue Dogs will die with this belief. The only way to remove this erroneous opinion from the public forum will be to remove its bearers from the public forum.
DPirate
Thought this was interesting:
http://www.telegraph.co.uk/finance/economics/7769126/US-money-supply-plunges-at-1930s-pace-as-Obama-eyes-fresh-stimulus.html
Kenneth Almquist
Some people, when faced with a challenge, are more inclined to try to find a way to feel better about the problem than to find a way to solve it. With those sorts of people, the more important the problem, the less likely they are to be willing to work on solving it. That’s why, after the 9/11 attacks, we rather quickly put serious attempts to address the threat of terrorism on the back burner and instead invaded Iraq.
During the Bush years, federal spending grew faster than the economy, but rather than raising taxes to pay for this addition spending, we cut taxes. It was obvious at the time that this was irresponsible, but now that we are facing an economic disaster and actually have to run a large deficit, it becomes even harder to deny that it was irresponsible to run up the deficit when times were relatively good. So the means that, in responding to the current situation, you have a choice. You can either try to fix the current economic crisis, or you can try to feel better about supporting deficits in the past by opposing them now. Bad economic news isn’t likely to cause folks who made the latter choice to reconsider.