Today is the anniversary of the Crash of '87. As I recall it occurred on a 'Black Monday' after a 'Blue Friday' in which the DJIA lost 100 points for the first time I believe. The markets were wobbly.
It is hard to remember exactly what happened in the market that day except in the retrospect in which I have studied it in detail. But I remember vividly how I heard about what was happening that day.
About three PM on Monday a colleague poked his head in the door and said, "The stock market is down 500 points." And looking up from my work I said, "I don't really care, I do not own any stocks now." And I did not. I think most of my savings at the time were still in bonds even then as I had ridden them down from the Volcker highs in interest rates and was too disinterested to change them. I do not recall now when I went to cash.
I had been reading a paper from a colleague about a possible breakthrough solution to a problem which we called 'the last mile,' which was the ability to practically connect end users in homes and small business to the big data pipes on the backbone network. And that solution is still evolving today. And so as far as I was concerned the stock market could go hang.
As you may recall, Greenspan 'fixed' the Crash of 1987 by printing money, and the regulators took some steps to clean up the portfolio insurance mania, and whatever other harebrained ideas the monied interests were pursuing. And life went on.
So you see, what concerns us so much today will also pass. One door closes, and another door opens.
Of course many more ordinary people will be affected by what happens in these markets of course, because of the TBTF Banks with their concentrated power and wealth, and the unfortunate financialisation of the real economy.
The trick is to order your life and your priorities, and to take the appropriate precautions. For the country the task and the labor is to put the genie back in the bottle, and bring the economy back into balance, changing the priority of the economic and public policy system from the redistribution of wealth by the financial sector to themselves and their friends, back to encouraging productive and inventive efforts to create real things that solve real problems serving the interests of the people, and not a bunch of rotten hearted plutocrats.
The issue is not that the government is redistributing wealth. The one percent have hijacked the financial system and public policy and they are redistributing the wealth of the nation to themselves with a reckless disregard for the long term consequences. This type always seem to accuse the other of what they themselves are doing. And they cannot stop themselves, because more is never enough.
