This week the Dow Jones Industrial average closed out above 10,000 points. The average American does not know what that means and I am no exception. Apparently, that is a good sign for the United States economy because when it went down, all Hell broke loose.
Did things change for you? They did not for me. But then, when the market “crashed”, it did not affect me too much either. Back when it crashed (that is, dropped to less than 9K, though still higher than it was a decade and a half ago), I knew that it would not be a problem for most of us. Many of us are responsible people who take our financial life seriously enough to not be affected by the whims of the stock market.
I am still wondering why we use the Dow Jones as a measurement of the economy. From what I understand, it is nothing more than the supposed top 30 companies and their overall wealth. I do not know how they get in that club or if they are really in the top 30 at that particular time. In any case, it is a terrible sample size to take, considering the thousands of companies here in the United States.
I mean, the Dow Jones Industrial Average is like taking the average of the top 30 ranked kids in a school where 35% are mentally handicapped and then saying that your school is the smartest one on the planet. It is annoying to say the least to see so many morons succumb to the hype that the Dow Jones brings when it goes up or down.
Anyway, the most frustrating thing this week for me was listening to Dave Ramsey rant and rave about how all these media types were panicking about the market crash and how they were all looking at the short term. And then he turns around and says that because the Dow reached above 10K this week, suddenly there is sunshine, lollipops, and rainbows coming out of Wall Street.
What a load of crock. You cannot tell us to look at the long term performance and then turn around and point to the immediate supposed recovery like this and claim it as proof that you were right. I think you are looking at the short term success and claiming victory. Is that not the same thing as looking at the short term collapse and claiming failure?
It would not have been so bad if he had not done this rant about three different times this week. Fortunately, I listen to his radio show via downloaded MP3’s so instead of listening to his nonsense on this matter, I skipped over it. Yes, I actually take some initiative when things like that annoy me. That is one of the reasons why I no longer have cable television.
I hate to say it and I do not mean to sound like a naysayer, but I believe that we are not out of the woods yet. What the government did this past year or so to “stimulate” the economy has yet to take full effect. Not only that, but the Cash for Clunkers program probably inflated the market last quarter big time. The national debt was 9 trillion last year around the time of the collapse. Now it is 12 trillion and is not going down like it should be.
I have my doubts about whether or not this recent “recovery” will hold for very long. Franklin Delano Roosevelt’s “New Deal” policies did nothing to bring America out of the Great Depression, a depression the Federal Reserve was created to prevent by the way. Instead, World War II brought us out, but then we had another depression immediately following the end of the war. It was only after our soldiers came back and started working again that we recovered completely and grew.
I think Dave Ramsey sounded a bit like a fool when he did these rants about how we have supposedly recovered from the economic contraction. To me, the writing is on the wall and the various stimulus programs have yet to be fully implemented. Not only that, but Congress seems Hell-bent on ruining our wealth and prosperity through cap and trade and Socialized medicine. That will be a dark day on Wall Street once her Highness and that professional wrestler get this crap passed through.
I doubt I could convince him otherwise. He just sounded like a fool when he said that we should not worry when the market went down, but now that the market has suddenly gone up, he thinks we should celebrate? No, caution is the order of the day on this one Mr. Ramsey.