Wall Street’s Reaction to Gunman in Connecticut

Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Like the rest of the world, I am deeply saddened and angered by the unfathomable mass killing of 20 children and six women at a school in Newtown, Conn., by a deranged gunman. My heart goes out to all of the victims and their families, as well as their friends. This tragedy already has led to bills in Congress to (1) ban “assault weapons” or (2) repeal the “Gun Free Zone Act of 1990” that keeps schools from beefing up security. I suspect that passing more laws isn’t going to end these killings until we address the deeper causes of social decline in America. See “Persuasion vs. Force” pamphlet by my wife and me at http://www.mskousen.com/persuasion-vs-force-by-mark-skousen/.


On Wall Street and on Main Street, the reaction has been swift. Although gun sales skyrocketed after the assault as citizens bought weapons to protect themselves and their families, gun manufacturers saw their stock prices collapse. Smith & Wesson (SWHC) and Sturm, Rugar & Co. (RGR) fell by more than 20% after the tragic shooting, although they since have recovered a bit. Investors know that legislatures will probably pass new laws curtailing the manufacturer of military-grade semi-automatic rifles and make handguns harder to get legally. Retail stories like Walmart and Dick’s Sporting Goods already have suspended sales of some rifles.

Vice President Joe Biden has been asked by the president to lead a task force on preventing gun violence and to look at the state of mental health in America. I hope the task force goes beyond the symptoms of the problem — the use of guns — and focuses on the deeper causes of disturbing mental illness in this country. Many mass murderers have been on Ritalin, Zoloft, Prozac, or other psychiatric drug. But the stock prices of those drug manufacturers keep going up.

Exclusive  Janet Yellen’s Egregious Denial of the Federal Deficit Bubble

You Blew It! Is Inflation Good?


“Remember, the U.S. government can’t run out of cash (it prints the stuff), so the worst that could happen would be a fall in the dollar, which wouldn’t be a terrible thing and might actually help the economy.”

— Paul Krugman, New York Times, December 15, 2012

For Paul Krugman, winner of the Swedish Riksbank Prize (mislabeled sometimes as the Nobel Prize in Economics), nothing is dangerous when it comes to government policy. Even though the national debt exceeds our annual final output, the Gross Domestic Product (GDP), of more than $17 trillion, he urges the Obama administration to triple the current deficit of $1.4 trillion to get the economy going. We can get away with it, he reasons, because interest rates are so low. (But what happens when rates rise sharply?)

Krugman is living up to his “crude” last name. He is the ultimate crude Keynesian who thinks that we are reliving the Great Depression.

Keynesian fiscal policy is extremely dangerous because it gives credence to the idea that government spending should be used at times (whenever there is a recession) to stimulate the economy. No longer is government limited to its useful purposes and legitimate functions. It must now serve as a stimulant. That situation opens Pandora’s Box.

Krugman is just as bad when it comes to monetary policy. He apparently favors rapid increases in the money supply and the monetary base to stimulate the economy. He says the only effect will be a fall in the dollar. It will cause the dollar to fall, but that’s not the only ill-effect. It will cause consumer and business prices to skyrocket in what Ludwig von Mises called the “crack up” boom, not unlike the real estate bubble created a few years ago.

Exclusive  Why Did This Happen? This Chart Says It All

I have a better quote, this one from Mises: “Government is the only agency that can take a valuable commodity like paper, slap some ink on it, and make it totally worthless.”

To read my e-letter from last week, please click here. I also invite you to comment about my columns in the section provided below.

Yours for peace, prosperity and liberty, AEIOU,

Mark Skousen

Mark Skousen
Newsletter and trading services
Personal website

share on:

Like This Article?
Now Get Mark's FREE Special Report:
3 Dividend Plays with Sky-High Returns

This newly-released report by a top-20 living economist details three investments that are your best bets for income and appreciation for the rest of the year and beyond.

Get Access to the Report, 100% FREE

share on:


Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

  • Forecasts & Strategies
  • Home Run Trader
  • Fast Money Alert
  • Five Star Trader
  • TNT Trader

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

  • Cash Machine
  • Premium Income PRO (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Breakout Options Alert
  • Hi-Tech Trader

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

  • Successful Investing
  • High Velocity Options
  • Intelligence Report
  • Bullseye Stock Trader
  • Eagle Eye Opener

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

  • Retirement Watch
  • Retirement Watch Spotlight Series
  • Lifetime Retirement Protection Program

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

  • Investment House Daily
  • Stock of the Week
  • Technical Traders Alert
  • Rapid Profits Stock Trader


Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

  • Dividend Investor

George Gilder

George Gilder is the most knowledgeable man in America when it comes to the future of technology and its impact on our lives.  He’s an established investor, bestselling author, and economist with an uncanny ability to foresee how new breakthroughs will play out, years in advance.

Product Details

  • Technology Report
  • Technology Report PRO
  • Moonshots
  • Private Reserve
  • Millionaire Circle


DayTradeSPY was founded by head trader Hugh Grossman, a retired internal auditor for a Fortune 500 company. After years of first-hand experience trying out one trading strategy after another, Hugh instead developed his own trading system centered around day trading SPY options. That’s it... Nothing else.

Product Details

  • Trading Room
  • Pick of the Day
  • Inner Circle
  • Online Workshops