David Gregory Mistakes Dow for Opinion Poll

David Gregory Mistakes Dow for Opinion Poll

David Gregory, host of NBC’s Meet the Press (3/1/09):

The Obama stimulus package, $787 billion. The housing plan, $75 billion. That’s $2.3 trillion. Seven hundred and fifty billion dollars additional in this document for additional bailout money for the banks. Meantime, what metric do we have to see how people–what people think of that government intervention? The Dow is one metric. It closed on Friday at its lowest level since 1997, just over 7,000.

The Dow is not a measure about what “people” think about government policies. It’s a measure of what the tiny, elite group of people who trade stocks think stocks are worth, which is to say what they think other people would pay for them. These evaluations have little to do with the long-term health of the economy. In some cases, a declining stock market might be good news for the economy, particularly if stock prices have been unrealistically inflated.

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