Without getting into the rest of Rushkoff's argument, he said the stock market, not the economy. Though the media tend to confuse these things, they are not the

Without getting into the rest of Rushkoff's argument, he said the stock market, not the economy. Though the media tend to confuse these things, they are not the same. At all. The S&P 500 is down nearly 50% since last year. Obviously, this has not produced a 50% drop in the standard of living. Here's a calculation of the historical total-market P/E ratio from 1871 to 2003: http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B23663E61%2DC865%2D46F2%2DB83E%2D4EEC2DDEC0C0%7D&dist=morenews&param=archive&siteid=mktw&garden=&minisite= http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B236... The historical average is 11 to 14, depending on how it is calculated. The same source reports that the S&P 500 P/E ratio on February 12 was 29.1: http://www.marketwatch.com/news/story/how-current-pe-ratios-stand/story.aspx?guid=%7B13BD1A19-0A04-4FEE-97A6-0A1C410D6881%7D http://www.marketwatch.com/news/story/how-current-pe-ratios-... That implies that, in mid-February, the market needed to drop another 52% to 62% to get back to the average P/E ratio of the market over the last century. Obviously, an average P/E of 11 implies that the market has historically spent quite a bit of time at an even lower P/E. Obviously, this is a facile analysis. The Marketwatch guy himself hedges it quite a bit (e.g. he points out that during a big recession P/E can surge temporarily due to the relative timing of economic events). But it does go to show that, when Rushkoff suggests that the market might drop another 70% or 80%, he's not talking about something unprecedented -- he's merely talking about a market-average P/E of 6. Nor is he suggesting a drop of 80% in a real economic measure, like employment, or GDP.