The rejection of President Bush's $700 billion proposal to bail out the financial sector by lawmakers and citizens on September 29 led to a 778-point tumble of the Dow -- the largest drop in its history -- and a 200-point dive on the Nasdaq. This isn't how Wall Street executives envisioned its third quarter drawing to a close as more than $1 trillion vanished from the United States economy.
I have many reservations about the government stepping in to rescue investment banks from their own incompetence, but Congress can't just sit on its hands and do nothing. The lack of reassurance that this economic crisis won't happen again is a major cause for concern, along with officials' inability to explain where the money is going to come from. (Taxpayers are already footing the bill for the wars in Afghanistan and Iraq, among other things.) It may be convenient to blame greedy corporate titans for this fiasco, but they have plenty of company -- starting with the people who didn't know how to live within their means.
Adhering to a budget is the difference between having a surplus and drowning in debt. One doesn't have to be a genius to know that living the high life on credit cards and loans, with insufficient means to pay the bills, is asking for trouble. (Then again, millions of people abandoned their common sense by purchasing homes and cars without saving for the rainy days that lurked around the corner.) Managing one's money is a skill that will never go out of style ... and, if anything good can come out of this situation, it's a greater need for financial literacy.
Life is full of ups and downs, and Wall Street is no exception. If the stock market can rebound from the Great Depression, it'll get through this. Now isn't the time to panic -- it's an opportunity to gauge one's tolerance for risk vs. reward in an unstable economy. Whatever path is chosen, just remember that patience is a virtue.
