Common Sense

Cavuto: No Deal Better than Bad Deal

Wall Street too focused on short-term fix


NEIL CAVUTO, HOST OF "YOUR WORLD": Get a deal or the markets will go nuts. Now, how many times have you heard that in these debt negotiations? That if these guys don't cobble together some deal in Washington, they're going to trigger a meltdown on Wall Street -- even if it is a bad deal.

That is Wall Street threatening raise the limit or we are going to lose it!

I've even heard big bank CEOs say the spending cuts aren't really a big deal. Just raise that debt ceiling, so they don't hit the roof. And all of those treasury notes and bonds, I guess a lot of them hold, don't lose any value.

And again, I'm thinking to myself, Self, we're afraid of these guys having a hissy fit? Is that any way to conduct policy? Gauging market reaction to it?

Don't get me wrong. I appreciate and admire and love our capitalist system, but not when it clearly responds to what's in its interests and not necessarily the country's interests.

Remember back in the fall of 2008, when Wall Street melted down nearly 800 points in a single day after Congress initially rejected then-President Bush's first TARP request?

You know why they did that? Because that was their request: a bailout for them, for banks and brokers.

So let's not read too much into their selective temper tantrums. Because laissez faire sometimes only extends to rescues that these guys think are fair -- namely their rescues and their interests, not necessarily the country's interests.

Now, that is not to say Wall Street isn't and shouldn't be worried about our long-term future. Let's just say it spends a lot more time focused on its short-term future.

There is a difference and we'd be wise to remember it. And Wall Street, you would be wise to appreciate it, because this isn't about momentarily protecting your assets and their price. This is about protecting something far more priceless: the country.

So I say, better no deal than a bad deal or a sloppy deal. Because you can't put an arbitrary deadline on fixing a decades-long mess. And you shouldn't pressure our leaders to settle, just so that you can trade.

Because if memory serves me right, after we reward the hissy fit, we don't neccessrily overcome future fits. After scrambling to do the Street's bidding after that huge 800-point selloff in 2008, does anyone, anyone remember where we were in March 2009? 4,000-points lower.

So much for calming crybabies. They still cry.

Again, I must stress, this is not to dismiss the markets. But we should not be Pavlovianly responding to the markets. They're looking at the near-term good. We should be looking at what is long-term wise.