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Self-fulfilling prophecies
Here's how the entire market works, in a macro-sized sense.
Ready? Here we go.
If people, as a whole, believe that the market is going to go up, they, as a whole, buy stock. If people, as a whole, buy more stock than they sell, the stock market goes up. Therefore, if people believe that the stock market is going to go up, <b>it will.</b>
On the other hand, if people, as a whole, believe that the market is going to go down, they, as a whole, sell stock. If people, as a whole, sell more stock than they buy, the market does down. Therefore, if people believe that the stock market is going to go down, <b>it will.</b>
To expand things further, if President Quayle... I mean Bush says that we're entering a recession enough, then people will feel, as a whole, that the market is going to go down. Therefore, they sell more stock than they buy. And, therefore, the stock market will go down, perhaps helping to propel us into a recession.
So, to wrap it all up, the entire market- and, to some extent, the economy- acts according to the idea of self-fulfilling prophecy. Bush clearly <b>wants</b> a recession, so that he will have an easier time pushing his tax cut through Congress. Myself, I don't get it, but then again, I actually <b>thought</b> about this, an activity with which our <caugh> President is clearly unfamiliar.
Sad, no?
Z
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