I’ve posted Entry #329 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Free Market Advocates Should Be Ashamed of Stock Crashes.
Juicy Excerpt: I am a conservative (with sympathies for a good number of liberal positions). One of the things that makes me a conservative is my love for free markets. So I naturally want to see our free market work. I don’t like stock crashes because they send a message to millions that they don’t.
And I think it is largely futile to try to convince people who have recently lived though a stock crash that free markets work. People are more influenced by personal experiences than they are by ideological arguments. When stock prices crash and people see their lives ruined, they look for something to blame. The obvious place to direct the blame for a stock crash is with the people who argue for the free markets in which stock crashes take place. Crashes undercut all of the many otherwise good arguments that conservatives make for free markets in the minds of millions of people.