L. Neil Smith's
THE LIBERTARIAN ENTERPRISE
Number 140, September 24, 2001
Cliff 'Em All!
America's Back In Business
by Vin Suprynowicz
Special to TLE
The Dow Jones Industrial Average plummeted 681 points Monday -- the first day of resumed trading at the New York Stock Exchange following last Tuesday's devastating terrorist attack on the neighboring World Trade Center.
The drop was about 7 percent, and exceeded the previous record one-day drop of 617.78 points, set on April 14, 2000.
The four-day market shutdown which ended Monday morning was the longest for the NYSE since March, 1933, when Franklin Roosevelt moved to halt a precipitous decline -- prompted in part by his own unprecedented interventions in the economy, including a ban on the private ownership of gold -- by declaring a "bank holiday" during the Great Depression.
The Dow closed at 8,924 Monday -- dropping below 9,000 for the first time in more than 2 1/2 years. The Nasdaq composite index fell 115 points; the broader Standard & Poor's 500 index was down 53.
Some had already begun moaning over the weekend that the market might "perform poorly" Monday, that "something should be done" to stop investors from "profiting from the misfortunes of others" by assuming massive short positions (attempting to make money on the market's fall.) There was even talk that there might be something "unpatriotic" about selling off existing holdings at a loss.
None of this is true, and those who had the resolve to allow uninterrupted trading to go forward on the world's greatest market showed considerable wisdom.
There has been much talk in the past week about how America is now "at war" with murderous, reactionary forces that hate capitalism, freedom, pluralism, and Western values.
It remains to be seen whether the American people still retain the virility and resolve to sustain any such war of survival over a long haul -- a war which, our leaders in Washington are now at pains to remind us, will not only involve American casualties, but will also have to be pursued no matter how the bleeding-heart commentators in Paris, Rome, Boston, and New York whimper that we're being "vindictive and overly harsh" in not giving quarter "when the other guy is down," failing to immediately minister to the needs of the widows and orphans of our bloody-handed assailants.
But if we are indeed at war, it is a war to defend precisely such engines of progress as the free market, of which the New York Stock Exchange is a prime example. (The targeting of lower Manhattan by Tuesday's terrorists was no accident, after all.)
The markets did not "perform poorly" Monday. They did just what they were supposed to do. With a far more sweeping efficiency than any bureaucratic central planners could ever hope to muster, they began the process of reallocating resources to fit the world's new economic and political realities.
There could have been no selling Monday without willing buyers. If buyers "speculated" that they could make money by buying stock on the downturn, does that mean those buyers have given up hope in America? Just the opposite -- they figure the emotionally driven downgrade has gone too far, that the underlying value of the firms in question is higher than is reflected in current prices. They are in fact "betting" on America, or there would have been no buying Monday at any price.
Meantime, what will happen to the cash now held by Monday's sellers? It's not in the nature of capitalism to let greenbacks sit around earning no return -- moneys gained by selling off "peacetime" holdings may well be quickly reinvested in various industries seeking private capital to fulfill new government arms contracts, or in oil exploration in anticipation of the need for new domestic supplies should production drop in the oil fields of Saudi Arabia or Iraq during some interim before their operation can be restored to the English and American oil companies that discovered and developed them in the first place. (Or was the plan to allow the billionaire families of Osama bin Laden and others like him to continue profiting from the unilateral abrogation of those contracts 50 years ago?)
Congratulated on what was previously the most damaging sneak attack on a sleeping America, almost 60 years ago, Isoroku Yamamoto sternly warned his compatriots, "I fear we have only succeeded in waking a sleeping giant, and filling him with a terrible resolve."
There is an old saying that if you strike at a king, you must kill him. Today, after less than a week, America is back in business. To certain parties, whether they shelter in Libyan palaces or Afghan hovels or amidst the giddy masses that stood and cheered in the streets of Nablus and East Jerusalem upon learning of the Trade Center attacks, this will not come as good news.