Decades ago, when I worked for one of America’s richest men, Norton Simon, he told me, “I stay out of the stock market. You could spend every hour trying to figure out what they’re thinking and still be wrong half the time.”
That advice comes to mind as stocks continue to dive in the days after a “conservative victory” in the debt-ceiling fight that should have cheered up markets by avoiding a default, cutting government spending and preserving the heavy hitters’ tax cuts, with more of the same in sight.
The talking heads will have convoluted explanations for crashing stock prices involving double-dip recessions and global fears, but a non-investor with no financial expertise whose interest is anthropological curiosity rather than greed can suggest something simpler.
As much as its denizens rail against regulation and government interference, there is something Wall Street hates and fears even more—-unpredictability—-and Washington’s recent behavior has given them a taste of Tea Party craziness with its Congressional freshman and GOP Presidential candidates saying in effect, “To hell with the economy–we want what we want.”
Nobel Prize economist Paul Krugman says “markets are pricing in terrible economic performance, quite possibly a double dip. And it also says that Washington’s deficit obsession has been utterly, totally wrong-headed.”