Behind the markets' rocky 2016 start

The Dow Jones Industrial Average plummeted more 500 points as oil prices sank, the latest tumultuous day on Wall Street this month amid new fears of economic trouble. Gerri Willis and Steve Forbes break it down for 'On the Record'

This is a rush transcript from "On the Record," January 15, 2016. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Tonight, ON THE RECORD, the market meltdown and every single one of you will feel this even if you don't own one share of stock. The Dow taking a nosedive and closing down 391 points. The American economy taking a major hit as the market of 2016 does not appear to be going away. So what is causing this frightful chaos? And what does it mean for you, whether you own stocks or you don't?

The "Fox Business Network's" Gerri Willis is in New York with the very latest.

Gerri?

GERRI WILLIS, FOX BUSINESS NETWORK: Well, OK. This is a big selloff, that's been going on for 13 days. We've had big swings in the market, triple digits. It's starting to frighten people who hold stocks in a 401(K) or just know people who do.

And here is the reality. Oil prices plummeting 70 percent from their highs. They closed below $30 a barrel today. And that's confusing everybody in the market. Now the talk isn't about stocks. Look at that fall 390 points. The talk is really about recession. The talk is about deflation. People are worried about the economy now.

VAN SUSTEREN: Gerri, why, though? What provoked all of this? I mean, we've lost $1.5 trillion in net worth just this year and we're down two $2.3 trillion from the high point in 2015. I mean, this is -- this is going -- this isn't just like a blip. This has been, you know -- well, the numbers speak for themselves.

WILLIS: Well, you know, and people feel like they have seen this movie before and I think individual investors are more incline to sell earlier rather than later and be patient, which is probably what they should do.

Yes, the oil price is important, but we've got a slowdown in China that it's affecting the entire planet's economy, affecting all countries. There is worries here domestically. Earnings for companies are down, falling, not good.

And now we see that we are entering our tenth year of G.D.P., that's the growth of the economy that is 3 percent or less. This isn't the America most people know. We are growing very slowly. And if you slow down just a little bit more, you are in recession.

VAN SUSTEREN: Well, China has actually had more of a growth. I mean, they have actually had a higher number than 3 percent. So how do we sort of turn our 3 percent around to be 4 percent or 5 percent?

WILLIS: Well, first of all, you can't really believe what China says, OK? Their numbers are suspect always. How can we grow our economy more? Well, there is some simple solutions.

You cut taxes and that gives more people more money to spend. It gives companies more money to invest. And you create an environment that's friendly to business.

VAN SUSTEREN: Gerri, thank you very much.

WILLIS: Thank you.

VAN SUSTEREN: So what is behind the worst two-week start to a year ever? Is it likely to get worse? And what does this mean for you at home.

Chairman and editor-in-chief of "Forbes Media," Steve Forbes goes ON THE RECORD.

Good evening, sir.

STEVE FORBES, EDITOR-IN-CHIEF, FORBES MEDIA: Good to be here, Greta. How are you?

VAN SUSTEREN: I'm very well. You see these horrible numbers. But I'm thinking what if you are sitting out some place like even in my hometown and you own one share of stock. What does that mean for that person? I know what it means for people who own stock and have seen it crater.

FORBES: Well, what it means is that the outlook for the economy, the markets don't think it's very good that there are no policies being put in placed that would regenerate growth.

Now the Federal Reserve is still gumming up the credit markets which are small and new businesses. Profits are under pressure. Regulations are coming out that are burdening especially small businesses. And the bank lending to small and new businesses has stalled because regulation is onerous.

So you put all that together and the prospect is not good. And, politically, Greta, still not clear what's going to happen in the political process. If pro-growth economic policies look like they were going to come in when a new president came in. Markets anticipating the future would start to rise up, but they don't see that picture clearing up yet.

VAN SUSTEREN: All right. Well, why did it seem to move so rapidly even in the first few days of this month, I mean, 1.5 trillion declined? What was their -- is it just the price of oil? Is that enough to shake everyone's confidence?

FORBES: Well, we have drastic cuts in the price of oil back in the 1980s. But we had pro-growth policies in place. The Reagan tax cuts, conquering inflation. Deregulation of some major industries. So the rest of the economy grew rapidly.

This time you are getting a crash in oil prices. And you don't have those pro-growth policies in place. So that means you are going to have bankruptcies there that are not going to be offset by vigorous new companies rising up as we had in the 80's and 90's.

VAN SUSTEREN: To what extent can you assign part of the responsibility for this, at least the last few days, to the Obama administration policy? I mean, is it just so many different factors or is this something directly that emanates from an administration?

FORBES: Well, the Obama administration hasn't had real growth -- pro- growth policies for a long time. And they are no indication that that is going to change. Regulations are continuing to come out. The E.P.A. is continuing to go on a rampage. Other agencies like the FCC are now putting its claws more and more into the Internet, slowing down investment there for the future.

So, it's -- the policies have been in place and they are just like it's water torture just hurting the economy more and more. We can't get out of second gear. We should be growing at two to three times the rate we have been in recent years. And the rest of the world is noticing it. So, if we are faltering, the rest of the world is going to falter as well.

VAN SUSTEREN: All right. So the way that it gets down to like someone who doesn't have stock is if you maybe want to expand your gas station or your diner or something. You are not going to be able to get loans and you're going to be afraid to it and really sort of it's like putting a foot on the throats of people all the way down the economic chain.

FORBES: That's right. And if you can get the financing, oftentimes now you can get from new sources, but the interest rates are higher which puts pressures on small businesses. But, in terms of people who have stocks, my advice is don't panic. These things don't last forever and you get whip sawed by emotions so even though the waters are choppy right now, this sounds Pollyannaish, but it has to be said, this country always finds a way to move ahead.

I'm old enough to remember the 70's, (INAUDIBLE), things look hopeless and we had two fantastic decades in the 80s and 90s.

VAN SUSTEREN: Well, I hope you are right. But I always -- I'm a little bit of a naysayer and I feel like sooner or later, it's not going to have that. You know, we have always been lucky that it's bounced back. But, anyway, you know better than I do. I'll go with your -- I'll go with your version.

Anyway, Steve, thank you.

FORBES: Thank you, Greta.