Some people ask me the difference between the study of commerce and economics. Well, within the first year or two of college and university, the students in both programs take similar courses. We learn about how demand and supply affect the price of goods and services, we learn about revenue, cost and profit, we learn about interest rates, money supply and inflation, and we learn about taxes, price floors and price ceilings… Most commerce students forget the last two relationships, and remember the first two because their program of study demands that they know how to operate a commericial enterprise. Economics, however, isn’t about running a business, it is following market trends, predicting the effects of outside forces, in both the short and long term on a variety of markets… In short, economists are taught to see the “future” of the economy.
I learned this lesson particularly well in second year Money and Banking. I learned that the stock market was all about educated guessing. Traders needed to know when to get in and when to get out, most of which was done with a bit of economic knowledge and a lot of luck, maybe even some information from a variety of sources within the business community. If they have confidence that the markets were going their way, they will buy stock. For years American markets have been arguably the safest place to put money, which comes as no surprise when looking abroad. Only now have we seen investors look towards India, especially after years of economic hardship for the country. Even China, now one of the more economically powerful countries in the world, used to be worrisome… Problem is though, many are putting their money into those countries, especially India, as the American economy has slipped into a recession…
You have heard Paul Begala and David Gergen discuss how Obama’s economic policies will fix the mess that the Bush administration “created”, ignoring the fact that it was mostly the fault of Democrats like Barney Frank and Chris Dodd who lined their pockets as the housing market collapsed, but now that he is elected, why don’t we see an increase in investor confidence? If Barack was the one to fix this problem, as they claim, why haven’t the markets responded to his election? Allahpundit at Hot Air reported earlier today on a story put out by Lynn Thomasson.
U.S. stocks slid, sending the market to its biggest two-day slump since 1987, after jobless claims jumped and the shrinking economy crushed earnings at companies from Blackstone Group Inc. to News Corp… The two-day tumble following Election Day wiped out more than half of the market’s rebound from a five-year low on Oct. 27… A report tomorrow will probably show U.S. employers eliminated jobs in October for a 10th consecutive month, based on economists’ estimates.
I might have a degree in economics, but I am hardly the foremost expert in my field. I can tell you right now that, from what I have learned, that much of what Barack Obama and Joe Biden proposed is disastrous, something I have stated previous in other posts. Am I going to say that this tumbling of the markets is the new President-elect’s fault? No. While I would love to point the blame squarely at this man, there are far too many factors to consider before making such a bold claim. I will say that CNN’s news team was more than questionable to suggest that simply electing Obama would end this crisis. As The Atlantic’s Megan McArdle said today on her blog, “If the crisis is as bad as some people fear, Obama will have no magic bullet to fire at it”.
To Peggy Joseph and all the other delusional Obama supporters, I want to say WAKE UP! I don’t care what MSM have been telling you, just because Barack has been elected, it doesn’t mean this crisis is now over. Do you think that if investors had confidence in Obama’s economic plan, a plan which many have called unsound, that we would be seeing this? Many have already begun to bail on the American markets, fearing a backlash from Obama’s proposed tax hikes. Wayne Huizenga, majority owner of the Miami Dolphines, said as much during a recent interview. What about job creation? As I stated in Economics for Dummies, much of what he intends to do, like raising minimum wage and taxing large and small businesses, will put many people out of work.
All in all, I think it is foolish that anyone would believe that simply electing a man would solve this problem. We see that the markets are getting worse, and in response, Begala and Gergen are discussing how President Bush has “tried to trap” Obama by setting a date for a G-20 summit to deal with this economic crisis. There is an economic crisis, and now that he is President, he does need to meet with world leaders and try to find a solution. Call me foolish, but that is why he was voted in to office right? To lead America? He was elected in part to solve this mess, a mess he himself had a part in. Don’t sit there and tell me Barack Obama doesn’t have to “walk the walk”, especially after he has “talked the talk” for the last few months.
It is time “The One” started acting like a President now that he has been elected, and it would be nice if the MSM would think about that instead of continuing to gush all over him…