Monday, September 29, 2008

Stock Market Drop

Ilya Somin at the Volkoh Conspiracy writes:

The stock market's record 778 point drop today will no doubt lead many people to conclude that the House of Representatives was wrong to vote down the bailout plan backed by both the Bush Administration and the Democratic leadership. Indeed, Senate Majority Leader Harry Reid has already made that argument. ...I think such claims are wrong.

What is good for stockholders isn't necessarily good for the economy as a whole.

Past history shows that stock market drops, even big ones, don't necessarily cause longterm damage to the economy.

Those are fair points, but I wonder how far the stock market has to drop before those who oppose the bailout tend to change their point of view.