How Now Low Dow?

Don't blame China for the stock market plunge.

By Daniel Gross
Posted Wednesday, Feb. 28, 2007, at 3:20 PM ET

Wall Street and the media have mostly blamed yesterday's huge U.S. stock market drop on frenzied, irrational Chinese investors. After a parabolic run up, China's stock market fell nearly 9 percent on Tuesday, triggering drops across Asia and Europe, and ultimately, in the United States. According to the conventional wisdom, sophisticated U.S. investors were taken unawares by unpredictable, irrational overseas behavior. For globalists, the domino effect is yet more proof that the world is flat. For anti-globalists, it's another warning about what happens when we tie our established economy too closely to China's emerging one.