What the media won't say about the stock market losses

Just days before the new president took office, the Dow Jones Industrial Average was above the 9,000 point mark.

As I sit here on a Saturday night penning this community newspaper column, I realize that during the last two months the Dow has dropped steadily to about 6,600 -- its lowest level in more than a decade. Nervous experts and investors are now questioning when the decline will hit bottom.

Yet for all the media coverage of the Dow’s dropping like a rock, scant attention has been paid to the most probable reason for the market’s perilous decline -- a lack of faith in the new president’s economic policies. This president holds a much different view of private property and personal wealth than other presidents throughout our history. To him, government should take private property and personal wealth through a more aggressive tax system in order to distribute private property wherever government wants it handed-out.

I probably don’t have to tell you that, to a large extent, the state of the market reflects the public’s confidence in government and in government’s stabs at managing economic growth. Investors -- the people who produce prosperity and create jobs -- must have faith in government’s involvement. If they don’t, if they begin to believe that government is consuming our nation’s prosperity rather than promoting it, they bail out of the investment markets faster than the government bailing out delinquent mortgages.

Investors and the American consumer are wary of the massive shift of resources from the private sector to the government sector. An economic agenda that taxes and punishes businesses and an economic “stimulus” package that’s heavy on government spending and light on tax cuts to stimulate our economy have served to seriously undermine the investment markets by creating major uncertainty and pessimism.

The seemingly bottomless bailouts, the trillion-dollar “stimulus” spending bill and the new president‘s multi-trillion dollar budget plans are hindering, not helping, our economy’s revival.

We are a resilient country and our spirit is strong. We will rebound as we always have. But I worry that this president’s policies -- rightly viewed as hostile to the capital markets -- threaten what would otherwise be a normal cycle of economic recovery. I hope I am proven wrong.

Perhaps the president’s reaction to the market’s depressing descent is instructive. In the wake of the Dow’s steady nosedive, the new president sought to downplay its importance. But that ignores an important reality: For our economy to truly rebuild itself, people must have confidence. And part of what this country needs is a healthy Dow Jones Industrial Average, always considered a crucial economic barometer.

The last president to truly pull America up from a steady decline, Ronald Reagan, knew he must inspire our confidence that better days lie ahead. But Reagan’s policies also honored the ideals of our Founding Fathers, who believed that a government that’s limited best enables its citizens to succeed.

From the earliest days of our nation’s experiment in self-rule, the Founding Fathers envisioned a government that performed only those functions that individuals couldn’t -- and then got out of the way to allow the most industrious, ingenious and enterprising people in the world to build an ever-improving nation rich in freedom, opportunity and success.

What we’re seeing in Washington today strays far from our founders’ brilliant and spectacular vision.