President Bush's tepid Rose Garden reassurances Friday that the government is addressing the economic crisis notwithstanding, Washington still hasn't tamed the Wall Street beast. Try as it might, the administration's combination of moves hasn't stopped the free-fall or lessened the fear gripping the nation's investors. The moves have been many, from interest rate cuts and the takeover of mortgage giants Fannie Mae and Freddie Mac to the $700 billion rescue plan and last week's decision by the Federal Reserve to loan money directly to corporations.
The week that just ended hit some stunning marks. If the woes on Wall Street hit home on Main Street, they have now gone truly global, reverberating from Reykjavik to London, Tokyo to Sydney, and prompting governments in Britain and elsewhere to rescue banks and other financial institutions. Much blame has been heaped on Washington for its hands-off regulatory policies, but the Bush administration and its European allies have agreed to work together on the crisis.
No one knows when the panic will end, and it's that possibility of utter collapse that has intensified the roller coaster volatility. The government's interventions are complex and will take time to work. Some congressional leaders and others want to add another stimulus package to help pump money into the economy. That would help soften the blow to local economies and perhaps provide some new jobs, but it also would add more to the government's enormous tab for this crisis.
If there is a ray of hope, it may be in how the New York Stock Exchange showed it can still bounce out of a hole as readily as it can fall. The Dow Jones industrial average plunged nearly 700 points in Friday trading but closed off a relatively mild 128 points at the closing bell. Might stocks have reached the proverbial floor?
The focus for many has been doom and gloom, but the Federal Reserve and Treasury Secretary Henry M. Paulson Jr. may have some moves yet to make. At least there is the comfort of knowing the nation has fared worse in the past: This financial crisis has not come anywhere near the historic lows of the Great Depression or even what the 2000 dot-com bust did to the NASDAQ. That's not a lot, but it's something.