A record decline in U.S. markets Monday spread panic to average Americans worried about their investments. Finance writers Jane Bryant Quinn of Newsweek and Brett Arends of the Wall Street Journal assess how the credit crisis will impact personal finances.
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The meltdown on Wall Street and the credit market crunch is causing ordinary Americans deep anxiety about their own financial security.
To help make sense of how to navigate the current financial turmoil, we turn to two writers: Brett Arends, personal finance columnist for the Wall Street Journal online; and Jane Bryant Quinn, she's the best-selling author and columnist for Newsweek and Bloomberg.com.
Welcome to you both.
Jane Quinn, we spoke last week, the week that Lehman Brothers tanked and the government took over AIG. Has the situation gotten appreciably worse for ordinary Americans since then, in terms of the impact it's having?
JANE BRYANT QUINN, columnist, Newsweek: Yes, it has. And you just have to look at what happened to the market yesterday. It came back up today, but people are suddenly aware that they face some terrible losses in their retirement plans, in their investments.
And I would say that the level of fear has ratcheted up considerably, and that's not good for the economy. It's not good for jobs.
So I think that what we've seen in the market in not passing this package and people suddenly looking at the edge of the cliff and say, "My gosh, this could be real trouble," I think that's a huge difference since we last talked, Margaret.
I think people are a little more comfortable then saying, "I don't think this is going to affect me. This is a Wall Street thing." I think they now see the extent to which it's going to affect all of us.
And, Brett Arends, are you seeing that, say, in terms of credit — we heard the congressmen talking about small businesses not being able to get credit — is that worse than two weeks ago? Or are we just more aware of it?
BRETT ARENDS, Wall Street Journal:
Well, I think it's a combination of both. I think what's really happened in the last couple of days is a loss of confidence, as well, in the ability of the political system to deal with this.
I mean, what happened on Monday was just a harbinger of what we might expect if this system — if this process collapsed and we were not able to get some kind of rescue package.
You know — I can tell people, I was actually — on Monday morning, I was working on a column. I was going to be advising people, you know, about buying the market and about investing long term.
And when the deal collapsed, I was so stunned, I mean, I can't write that with any confidence until I am sure or feel confident that Washington is going to step in and actually do something to fix this problem.