Global stock markets are falling, and most of the blame is placed on Europe. German factory orders fell 5.7% in August, real GDP is stagnant or falling in many European countries, Standard & Poor’s has downgraded France to AA from AA+, and the International Monetary Fund and the Organization for Economic Co-operation and Development are reducing growth estimates.

All of this is setting off a cascade of fear and pundits are begging governments to “do something.” Yet this is not like the panic of 2008, and the slowdown in...