Stocks prices reflect lots of things. You pointed out one. To say that stock prices dropping don't affect a company immediately is only true if said company has no money invested in stocks which as we all know... many if not most of them do!
If company ABC has 9 billion in liabilities and 10 billion in assets last year (%40 of which were in long term investments) they were in good shape. Now all of the sudden company ABC has 9 billion in liabilities and 8.6 billion in assets (figuring a %35 drop in their long term investment value) guess what, they are insolvent! Nobody will loan them money, revenues decline due to loss of consumer confidence and either conservatorship, receivership or bankruptcy is soon to follow (if Jim Cramer has anything to say about it).
So while I agree with the point you made I think the administration is crazy to ignore the fact that our market has dropped down to levels not seen since before Monica Lewinsky became a household name! Companies are failing left and right and stabilizing the market is key to saving many companies and jobs in the short term. IMHO
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