As you may have heard, it was another unpleasant day on Wall Street yesterday, with all of the major indexes falling. From a political perspective, consider how some news outlets covered the story — and connected the drop to President Obama.
Fox Nation ran this headline: “Stocks Tumble Worldwide After Obama Speech.” Drudge showed a Dow Jones chart with the headline: “Jobs Plan Tanks.” Politico‘s front-page headline told readers: “Markets plunge after Obama speech.”
In fairness, the Politico article was slightly better than its ridiculous headline, but the larger point is the same: these outlets tried to draw a connection between the president’s jobs speech and the one-day drop on Wall Street. After all, Obama spoke on Thursday night, and stocks slipped on Friday morning, ergo, one caused the other.
The problem, of course, is that this isn’t even close to being accurate. We know why the major indexes fell yesterday.
The stock market tumbled again Friday as doubts about the ability of European leaders to address a spiraling debt crisis on the continent overshadowed President Obama’s new proposal to spur U.S. job creation. […]
Juergen Stark, a member of the European Central Bank’s executive board, resigned Friday after raising internal opposition to the bank’s efforts to contain the continent’s debt crisis. In recent weeks, the ECB has been buying large quantities of Italian and Spanish bonds in an effort to prevent borrowing costs for those countries — two of Europe’s largest economies — from spiking to prohibitive levels. […]
Meanwhile, rumors were rampant in financial markets Friday that Greece could default on its debt as early as this weekend.
To suggest to U.S. news consumers that markets were reacting to the president’s jobs speech is absurd, even for conservative media outlets.
That said, it’s probably worth noting that investors may have been bolstered, at least a little, if they thought the American political system were still capable of functioning responsibly, and if the American Jobs Act had a realistic shot of overcoming Republican opposition. In other words, if Wall Street had confidence that Washington could give the economy a boost, the selloff may have been far less severe — but that confidence doesn’t exist.
Remind me: whose fault is that?