OK, so Congress passed the bailout (and about $150 billion of pork) and the stock market continues to tank. Could it be that fear, not tight credit, is fueling the market? Did it help that both presidential candidates said that this is the worst financial crisis since the Great Depression? Do the cries of the media help the situation?
The Theory of Rational Expectation in economics says that the economy will follow the expectations of the population. Are we expecting the economy to tank?
© 2008, J. M. Erickson. All rights reserved.