America’s Debt Crisis Suddenly Disappears

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From the Wall Street Journal:

Investors again demonstrated the power of positive thinking on Wednesday, driving U.S. stocks near three-year highs….After a shaky start to the week, when Standard & Poor’s issued a warning on the U.S. credit rating, stocks have rebounded. The Dow Jones Industrial Average soared 186.79 points, or 1.52%, to finish at 12453.54, its highest close in nearly three years.

That was quick! It took a grand total of two days for investors to decide that America is in great shape after all.

So here’s the thing: if you had a substantive theory1 about why S&P’s announcement on Monday cratered the stock market — any theory at all — it was wrong. It doesn’t matter if your causal mechanism was related to treasury rates, our broken political system, the value of the dollar, the price of gold, investor fear of company earnings, or anything else. It was wrong.

Either that or it was right for seven hours on Monday and then produced the precise opposite reaction two days later, even though nothing about America’s financial condition has changed. But if you think that’s the case, now you have to explain that. Good luck.

1As opposed to a nonsubstantive theory. For example: investors are idiots and they panicked. Or: investors figured that other investors were idiots and would panic, so they decided they’d better sell first. Or something like that.

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BEFORE YOU CLICK AWAY!

“Lying.” “Disgusting.” “Scum.” “Slime.” “Corrupt.” “Enemy of the people.” Donald Trump has always made clear what he thinks of journalists. And it’s plain now that his administration intends to do everything it can to stop journalists from reporting things they don’t like—which is most things that are true.

No one gets to tell Mother Jones what to publish or not publish, because no one owns our fiercely independent newsroom. But that also means we need to directly raise the resources it takes to keep our journalism alive. There’s only one way for that to happen, and it’s readers like you stepping up. Please help with a donation today if you can—even a few bucks will make a real difference. A monthly gift would be incredible.

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