Obama's Catastrophe

Words matter.
Would someone please tell President Obama that?
In the campaign, Obama pledged to rid the government of the politics of fear and replace it with a politics of hope.
I guess that's why, when he was still pitching his stimulus bill, he predicted that an already bad economic situation would become a "catastrophe" if the legislation did not pass. That is one way to talk over the heads of the Senate and directly to the people, but that word, and other similar statements from the White House, have long-lasting and far-reaching effects.
How does the actual owner of stocks and bonds --in an investment portfolio or a 401k-- actually react to the statement that we are a step away from a catastrophe? What is he or she likely to do with his investment when the President states (incorrectly) that this is the worst economic crisis since the Great Depression?
I'll tell you what happens: the faith of the investor in his or her stocks and bonds erodes and fades away. That investor sells, driving the market down. The value of publicly owned companies has dropped by almost 50 percent since November. Billions of dollars of savings have been lost, and billions more will be lost if the market continues spiraling downward, spurred on by the gloom and doom coming from the White House and the political class in general.
Here are some economic truths worth remembering: Land, especially developed land, never becomes worthless. Like gold it has an inherent value. The collapse of housing prices has more to do with the hyperinflation of real estate prices during the past few years than it does with the credit crunch. The credit crunch happened because houses became too expensive and the market walked away from real estate. When prices went down --when the bubble burst-- then the banks were jammed up with bad paper and homeowners found themselves "under water."
One thing President Obama does well is the rhetoric of hope. It is about time he started spreading some confidence-restoring sunshine around the country.