Crisis

The Japanese stock market has dropped 11% so far in Friday trading.

Friday stands to be a crazy day. I'm reduced to hoping it isn't a historical day.

Rationally, it shouldn't. The physical capital, the technology, the infrastructure, the innovation, and the productivity of the US and global work forces are intact. There was an interesting report on PBS News Hour tonight about Silicon Valley and how many entrepreneurs here are optimistic about the potential for new startup companies in the tech sector. There has been no violence to the people or machines that drive economic growth. Unfortunately this has the potential to be beyond rational, and the worst case scenario is on the table, and that's really, really bad.

The next time a student whines that social studies are not relevant to their daily lives I think I might have a complete meltdown. It is nearly impossible to imagine people retiring at 65 as planned with people's savings worth 30% less, and that's just counting the situation as of the close of business Thursday -- basically, it looks like we all just got sentenced to thousands of hours of extra work. That isn't relevant? The baby boomer generation just got whacked and will want to be sticking around in the labor market for much longer than expected. That will either produce greater competition for jobs, or, if they get replaced, put an unforeseen burden on younger generations to take care of their elders.

In 1987 a speculative bubble burst, with housing and bad banking in the mix, and the market tanked 20% in a day. The next day, it bounced back, and people who bought at the bottom made huge gains for more than a decade. That probably won't happen this time for all sorts of macroeconomic reasons. I'm just trying to find a silver lining, hoping that we've reached bottom. If not... yeah... I'm basically down to hoping that we make it through tomorrow, the next week, the next month, and if we do, we'll get away with "only" a bad recession. Whoop. De. Doo.