Tuesday, January 22, 2008

are Bush and the Congress causing the stock market plunge?

Two scenarios are possible here:

They may be bringing unnecessary attention to a soft economy, causing people to think things are worse than they are. Interestingly, falling consumer confidence can become a self-fulfilling prophecy to some extent.

In dealing with a soft economy, the proposals for short-term band-aids are perceived as so bad or meaningless that the market is responding negatively.

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