Traders work on the floor of the New York Stock Exchange at the opening bell August 8, 2011.
Traders work on the floor of the New York Stock Exchange at the opening bell August 8, 2011. - 
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Kai Ryssdal: It seems, as we wrap things up, like it might be good to take a step back; to reinforce the lesson that the markets are not the economy and the economy is not the markets. Our New York bureau chief Heidi Moore is the voice of reason today. Hey Heidi.

Heidi Moore: Hey Kai.

Ryssdal: So the markets have seen -- needless to say -- better days. What was it about today and the end of last week?

Moore: Well today was a huge symbolic shock to the U.S. It's the first time in history that we've lost our credit rating and it's a little mortifying, so naturally people were expecting a bloodbath in the stock markets and they certainly got it. It was really ugly out there and the Dow was down 631 points. But ironically, just one day in the market doesn't tell us what we need to know about the economy. And what S&P's downgrade was really about was the economy and where we're going and that is nowhere good. We're clearly not on an upward trajectory.

So I talked to some people in the markets about what they were hearing and seeing. And one of them was Charles Horn, he's a banking lawyer with Morrison & Foerster, and he's been talking to his clients who are bankers. And here's what he told me they were saying.

Charles Horn: I would say that the reaction I heard from my clients was general dismay. Frankly, they were depressed by it. It's a further manifestation of the depth and duration of this economic downturn -- that we are having difficulty getting out of it.

So today looks like an apocalypse in the markets, but it's not. A true apocalypse would have been if we sold Treasury bonds, if you saw a banking crisis, but we've learned from 2008. We know how we're interrelated now. And what we're going to see instead is a slow apocalypse.

Ryssdal: What does it say, then, that the bond market actually was attractive to people today -- that people bought U.S. bonds and interest rates actually fell. Help me with that.

Moore: I know, right? Don't you wish that when your credit score gets downgraded that you have to pay less to borrow? But that's the case. The U.S. is credit worthy, even S&P says it's credit worthy. The issue is not whether we can pay our bills. The issue during the debt ceiling debate is whether we would. We didn't get a good answer to that and S&P was very unhappy about it. We're still a very credit-worthy country and we're also the place where people can put their money safely. You can always buy and sell a Treasury bond -- that will always be possible -- and that's what investors know, so they keep buying them.

Ryssdal: All right. So the thing is that Treasury bonds don't create jobs. How do we get substantive economic help out of what's going on today and this past week?

Moore: Think of this way: It's kind of like a Choose Your Own Adventure book, right? You remember those from when you were a kid?

Ryssdal: Vaguely, yeah.

Moore: And so we have chosen the wrong adventure. For the past 20 years we have chosen the adventure with taking on too much debt and not really thinking about the future. And now we have to chew through our ropes and confront the thugs, and take a look at what you said: jobs. That's the most important thing. So people have been talking for a long time about creating some sort of works progress administration-type effort. You know, infrastructure. We have things that need to be fixed in this country. And if we can be somehow bold and big and get people to work there, maybe we can move the needle. But we can't cut or tax our way to a good economy. We're going to have to create jobs.

Ryssdal: Very quickly: What is your gut right now? Is it fear or just unease?

Moore: It's unease. But it's going to be unease for a really long time. We have to get rid of our debt as a country. We have to fix our budget. We have to get our political system working and our economy back on track. So it is unease, but we should get used to it. This is, as they say, the new normal.

Ryssdal: Heidi Moore, our New York bureau chief. Thanks a lot, Heidi.

Moore: Thank you.