The mainstream media is busy trying to spread panic in the markets over yesterday's 1,175-point stock drop, repeatedly touting it as "armaggedon" and "the worst point loss in history."  And more to the point, they are doing it to stick it to President Trump. NBC News reported:

Until now, the surging stock market has been one of the President’s favorite and most frequent talking points. The president is also facing a looming government shutdown.

Their broadcast report in the same video is even worse.

Yes, President Trump was unwise to tout the rising stock market, given that stocks go up and stocks go down. There had been warnings in the days before the downturn, some of which he should have known about, here, here and here. But this is not the bonanza the mainstream media thinks it will be.

Yet as the press dances around and try to make hay off Trump, it's worth noting that the point loss is only newsworthy if you get excited about big numbers, not if you are an actual investor.

According to the gold standard on investing, Investor's Business Daily (full disclosure, I used to work there as an editorial writer), it's hype. News editor Ed Carson throws cold water over all the goggling over the number:

But in percentage terms — and that's how you should look at it — the Dow had a very bad day, but hardly historic.

Because the Dow, S&P 500 index and Nasdaq composite have run up so much in the long bull market, comparing today's point losses to earlier eras isn't relevant. Percentage changes offer a better comparison.

The Dow's 4.6% loss on Monday was the worst since August 2011. But it didn't even crack the top-20 of all-time losses. It was just the 25th worst loss since 1960.

So much for the reports, and there were a lot of them, particularly on TV, that the big point loss is something special. Some of the better news agencies, such as Bloomberg, noted this, but buried it at the bottom of their earliest stories.

All the same, it's natural to wonder what the downturn means, given that it was noticible enough, and programmed trading surely magnified it.

After all, we have real economic growth, productivity gains, the creation of value, startups, and pay raises, all because of the GOP tax cut package passed in December. Take a look at Jack Hellner's piece on the value-added to the economy by the tax cuts, it's a good piece.

Meanwhile, the downturn included big losses for some junk companies such as Bitcoin which is fake money and doesn't create any actual value in the economy, so that is probably a good thing.

But it included everyone else, and it happened on the day that a new Federal Reserve chief took office, suggesting that the low low interest rates and era of cheap money that allowed the Obama administration to spend with abandon are probably over. Double-entry bookkeeping will resume shortly, meaning, interest rates will rise.

Former Federal Reserve Chairman Alan Greenspan, who has called market reversals in the past, and is certainly heeded in markets, may have had something to do with triggering the downturn, too, warning five days ago of a bubble, on the grounds that tax cuts may not pay for all the big government we have, and unfunded initiatives from the President's State of the Union address, such as infrastructure. Greenspan is an old bond guy and married to Andrea Mitchell, so he should be taken with a grain of salt.

But what we have here in this stock shakeout, is the makings of an interesting test for free markets:

Can the effects of the tax cuts on a revitalized private sector outperform the costs of the big government we have, with its coming infrastucture projects, its unreformed entitlements and its rising interest rates? Or will we have to find more ways to cut government and do something about failing programs such as Social Security and its phony trust fund?

Most free marketers say those things will have to be reformed to match the revitalization in the private sector. But many think it will come to pass, given that Trump already is cutting the bureaucracy. That may be why many analysts are saying this non-historic event is likely to be short lived.

Nice try, making hay off Trump, media.