Comfort in Predictability

So the Dow Jones took a pretty decent tumble today, as seems to be the trend lately. Obama et al. keep telling us to find the illusive hope we were promised in a rising stock market, only to discover that the rise is very short term and never to the levels it achieved before the crash last fall. The market is simply erratic and generally poor.

Analogous proposition: Pretend we are playing poker and you have a straight flush while I have a pair of threes. You would declare that you win,no? But I, with politics on my side, declare that it's my house and my game and therefore the a pair of threes is the highest possible hand. As I take your money, throw you out, and say, "See you next week!" would you reply, "I'll be there!"?

Essentially, this is what's happening in the market. The government is changing the rules in unpredictable ways according to present circumstances. The market, however, is only as predictable as the policies that govern it. If the government runs around balancing and counterbalancing, bailing out and taking over, regulating and wreaking havoc with an ad hoc, completely unpredictable approach, the market will never improve or even stabilize. If you have money to invest, are you going to trust it to a company that might be absorbed with you crowded out (such as with GM stockholders) or hang on to it? Consumers are not sure what the government is going to do next and therefore do not want to chance their money in some of the most important areas of the market. This contributes to the concept of "consumer confidence" in that consumers can never be confident of the institution's ability to conduct itself as it has. While unpredictability is inherent within the system, the rules of the system itself should be nothing but predictable.