I beg your indulgence this week as I ignore medical news and offer some personal reflections.
Unless you’ve been avoiding all news sources for the last few weeks, you know that a lot of people all over the world are scared. Today’s headlines scream about the worst week ever on Wall Street, with trillions of dollars of assets evaporating. No one is sure when the housing and credit markets will stop falling. No one is sure whether the actions of the U.S. and other governments to keep credit flowing will work.
And this calamity did not befall an otherwise tranquil world. Those who were paying attention had plenty of other reasons for anxiety, from a nuclear-armed Pakistan that always seems one election away from anarchy to our federal budget becoming an unworkable fantasy as the baby boom retires.
The sky really seems to be falling.
I’m not an economist, and I can’t predict when or how this will end. I certainly won’t minimize the very real harm that’s been done. The staggering numbers aren’t just theoretical paper losses. They represent the vanishing of retirement plans, the loss of homes, and the destruction of years of gains.
All I can do is remind us that the world will not end. At some price buyers will want houses again. At some interest rate lenders will write loans again. If governments keep their currencies stable, markets will eventually hit bottom and stabilize. The engine for economic growth after all is that people want stuff that they don’t have, and that they are willing to work and spend for it. That hasn’t changed. The sun will come up tomorrow.