President Obama is not getting the message. Yesterday when asked about the Market's Decline during his administration he replied that "What I'm looking at is not the day-to-day gyrations of the stock market"
Sorry Mr. President but you are not getting it. The Stock Market has not been gyrating during the month and a half of your presidency, that suggests lots of ups and downs. The stock market has been going DOWN during your administration. And every time you announce another Program it goes down even further. Just look at the chart above which shows the Dow Jones average from Inauguration Day through March 3.
The stock market is falling because you fail to see that your programs will retard investment in American Business and raise taxes on everyone, not just the top 2%. Investors also fear your "talking down" the economy and the fact that you have set up big buisness as the enemy of the people. Your energy plan and your love fest with organized labor will raise prices on top of the higher taxes.
You Sir, are Killing the Economy. In short, Wall Street is sending you a message, STOP IT, YOU'RE KILLING ME !!!:
THE MARKETS' MESSAGEFOR THE PREZ
By WILLIAM KRISTOL
March 4, 2009 --
SO the stock market drops over 25 percent since Election Day, almost 20 percent since Inauguration Day - and President Obama tells the American people at his press conference yesterday not to "spend all your time worrying about that":
"What I'm looking at is not the day-to-day gyrations of the stock market, but the long-term ability for the United States and the entire world economy to regain its footing. And, you know, the stock market is sort of like a tracking poll in politics. You know, it bobs up and down day to day. And if you spend all your time worrying about that, then you're probably going to get the long-term strategy wrong."
But the stock market isn't gyrating, or bobbing up and down. It's dropping. And the reason it's dropping is that the financial system remains in desperate straits.
Obama came close to acknowledging this when he continued: "Now, having said that, the banking system has been dealt a heavy blow. It has to do with many of the things that Prime Minister Brown alluded to: lax regulation, massive over-leverage, huge systemic risks taken by unregulated institutions as well as regulated institutions.
"And so there are a lot of losses that are working their way through the system. And it's not surprising that the market is hurting as a consequence. In fact, you know, I think what we're seeing is - is that as people absorb the depths of the problem that existed in the banking system, as well as the international ramifications of it, that, you know, there's going to be a natural reaction."
But the markets were aware of the huge problems plaguing the banking system before Obama became president. Surely, what they're reacting to now is his failure to address them.
Obama has spent far more time publicly defending his stimulus package, and touting his health care, energy and education proposals, than explaining how he's going to deal with the banking crisis. Yet virtually all serious observers - whatever their politics, whatever their economics -agree that the financial crisis is the central crisis we face, that the core of the problem is the banking system. But the administration has treated this as merely one "leg" of a three-legged stool (the other two are stimulus and housing), and the least urgent one to fix at that.
And now Obama wants to focus on "long term" issues like health care and energy and education - while not showing any sense of urgency about the banking crisis.
Instead, the administration throws more money at Citi and AIG. At best, this simply puts off the day of reckoning (but at some considerable cost); at worst, Obama's Treasury is fiddling while Rome burns.
And it's not as if there's that much disagreement as to what has to be done; everyone agrees the toxic assets have to be separated from the rest. And the disagreements about how to do this seem to some degree semantic ("nationalization" followed by selling off good assets vs. setting up a "bad bank" vs. public-private partnerships to buy and manage toxic assets, etc.).
What spooks the markets, I believe, is that the Obama administration has shied away from embracing any solution. Under his administration, has a single toxic asset actually been seized, separated, sold or de-toxified? I don't think so.
No, the stock market isn't like a tracking poll. It's about real money, about the real livelihoods of real Americans.
Obama's political advisors may have told him that dealing with the banking system will be politically difficult. I'm told almost every theme in Obama's speech last Tuesday night was focus-group tested - and the speech played pretty well politically. But the markets weren't impressed. Isn't it time for Obama and his team to get up the nerve to stop playing politics and to govern?
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