Two weeks before 19 October 1987, I warned publicly that “in two weeks, the stock market will lose 20% of its value.” Then, on 19 October 1987, the S&P 500 had the biggest one-day fall in its history – dropping 20%.

I was immediately deluged with letters and phone calls (no emails then) from people who wanted to sign up for my “investment letter”. I told them, with some regret, that I didn’t have an investment letter.

What I didn’t tell them was that I had been making the same prediction – that in two weeks the stock market would lose 20% of its value – for three years.

Everyone who makes economic predictions will one day be proven correct if they stick to their guns.

Which brings us to what happened on Monday.

“Stock markets are crashing, jobs numbers are terrible, we are heading to world war three, and we have two of the most incompetent ‘leaders’ in history,” Donald Trump bloviated on Monday.

Rubbish. The United States is not facing imminent recession. The American economy is still growing. There is no reason to panic.

Trump and his lackeys would like an economic panic because nothing else they’ve thrown at Kamala Harris is working.

Could Trump’s billionaire supporters try to bring on a crash by suddenly withdrawing their assets from the stock and bond markets? That would be difficult to pull off. They couldn’t do it without suffering massive losses. And where would they put their assets in the meantime?

In truth, the Federal Reserve chair, Jerome Powell – who Trump first appointed in 2018 – should have begun cutting interest rates at the Fed’s last meeting rather than waiting until September.

The Fed’s current 5.3% prime rate is too high. The Fed’s goal of 2% inflation is too low.

But there’s no reason for the Fed to make an emergency rate cut right now. Doing so might be seen as a sign that the Fed is worried about the economy falling into recession, which itself could cause a panic.

Instead, Powell should make it clear that the Fed is likely to cut the prime interest rate by half a percentage point at its September meeting.

The other variable affecting markets is the Middle East. The world is justifiably worried about that tinderbox – and Netanyahu’s insistence on holding power by escalating warfare.

Could Joe Biden do more to restrain Benjamin Netanyahu – for humanitarian as well as economic and geopolitical reasons? Yes. Stop shipping him offensive weapons.

As to the stock market and the American economy, history provides some solace.

19 October 1987, proved to be a short-term drop. The Fed poured money into the banks. Brokers didn’t default. Within two years, the market made back all its losses. The economy was fine.

And although Trump doesn’t seem to realize it, the stock market is not the real economy, anyway. The richest 10% of Americans own over 90% of all the shares of stock owned by Americans. The richest1% own just over half.

The real economy consists of average working people. Their spending determines whether and how fast businesses hire more workers.

Lower-income people have been especially hurt by high interest rates – which have raised credit-card fees, car loans, mortgages and rents.

Last Friday’s slower-than-usual jobs report for July provides evidence. Employment slowed in July because the paychecks of average working people aren’t going far enough to keep employers hiring.

One reason paychecks aren’t going far enough is that interest rates are still too high.

But there’s a second reason paychecks aren’t going far enough. Big corporations still have too much power to keep prices high.

Here, the remedy is more competition.

This won’t happen overnight, but the Biden administration’s tough anti-monopoly enforcement is a good start. The Federal Trade Commission’s Lina Khan and the justice department’s antitrust chief, Jonathan Kanter, have for the first time in more than a half-century made antitrust enforcement an integral part of economic policy making.

But there’s far more to do. Hopefully, Khan and Kanter will remain in their positions in a Kamala Harris administration.

In sum, what should we take from today’s tumble on the stock market?

First, there’s no reason to panic.

Second, Jerome Powell should all but commit the Fed to a half-point cut in the prime interest rate in September.

Third, tougher antitrust enforcement over the longer term will better fortify the US economy against a deep recession.

Fourth, don’t listen to economic prognosticators.

• Robert Reich, a former US secretary of labor, is a professor of public policy at the University of California, Berkeley, and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His newest book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com