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Economy Won't Be Sunk By Wall Street's Storm

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The Tampa Tribune

Published: October 7, 2008

It's a wild ride, but the nation's economy isn't going to keep going down, down, down.

Turmoil and falling prices create opportunities that investors will pounce on when they feel conditions are right. It happened Monday afternoon when buyers saw bargains and bid stock prices back up after the morning's scary fall. It will happen on your street when that house for sale for months is finally snapped up by a bargain-hunter.

Investors know that the Federal Reserve is simply not going to let banks run out of money. And there is still room to cut interest rates, if necessary.

The overwhelming majority of homes are not in foreclosure and their owners are not going to miss a payment.

Credit may be harder to get for a while, but the problem will be self-correcting once integrity returns to the lending agencies. If California or any other state temporarily runs short of money, Uncle Sam will give it a loan.

Our houses may be worth less than last year, but no one with any sense ever expected housing prices to keep accelerating ahead of wages forever. When a middle-income worker cannot hope to afford a middle-class house, a correction is overdue.

Many people are afraid to spend money right now, but they'll regain their nerve as soon as they're confident they're not losing their jobs and life savings in some sort of mysterious meltdown.

All the ingredients for a robust economic rebound remain firmly in place. Local banks are still open for business. ATM machines remain full of $20 bills. Most businesses are honestly and competently managed. All the government institutions supporting the economy and the rule of law are functioning smoothly, including the police and courts.

Sure there is plenty to worry about, including the cost of the congressional rescue plan. The wars in Iraq and Afghanistan have eliminated what we once described as a peace dividend.

Taxpayers now understand that war can't be fought cost-free, and President Bush is realizing the same thing. He stopped golfing, explaining how "playing golf during a war sends the wrong signal."

It's a useful signal to send. Whether you're fighting a war or buying a highway or a house, sooner or later you have to pay the full price.

And it's true, as Pope Benedict XVI points out, that "we are now seeing, in the collapse of major banks, that money vanishes. It is nothing."

It's a healthy reminder that money doesn't build families and nations. The important ingredients are hard work, love, faith, generosity, patriotism and hope. Remember too that homes don't vanish even if they are repossessed. When one business closes, an opportunity opens for someone else.

The initial sell-off of stocks Monday followed a worldwide panic about what British Prime Minister Gordon Brown calls "the first truly global financial crisis."

What the world is experiencing is more of a correction than a crash. As always, the optimists returned to the market Monday and most of them, eventually, will be glad they did.

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