Actually, I'm not so sure that the stock market fall today should be that surprising, or even seen as just a reaction to the failure to pass the bailout plan. I've believed that with all the bad economic news of the last year that the Dow Jones would fall more than it has, perhaps to at least 8,000 before stabilizing, maybe more.
I don't know. The stock market has just become a kind of magic box, where wealth is supposedly created and disappears, like ghost-like atomic particles in a cyclotron. That's not how it works, is it? Isn't real wealth produced in factories, like the new ones springing up in China and Vietnam (and disappearing in my town). Isn't it produced when something of real value is created, like a good plug-in electric car or a music CD that somebody actually wants to buy. Or a new drug that cures a disease. Or delicious fresh vegetables or good wine? Or a service that is desireable, like quality health care. Wasn't the real failure of Soviet Communism the fact that they just couldn't manage to produce things that people really wanted?
There's something about 'financial' wealth that just seems unreal or evanescent. Isn't the real long-term problem for America that we simply don't produce enough things that the world (or even our own nation) wants? But we keep wanting more things than we produce, so we borrow wealth from others until we're maxxed, but basic economics won't allow that. Isn't the real problem right now that we're totally maxxed out on debt (because we don't actually create many things people want) and we've hit a wall?
Creating things people want. Living within our means and not borrowing ourselves silly. Now that makes for real wealth. And real economic wisdom, too.