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Since Obama took office on Jan. 20, the Dow Jones Industrial Average (DJIA) has lost over 1,000 points, including a nearly 400-point drop on Feb. 10 after a disappointing speech by Obama’s Treasury Secretary Timothy Geithner on sorting out troubled assets. Cramer pleaded with the administration to take note of the possibility it might have something to do with that.
“I’m not asking for the Feds to give us a plunge protection team, to stop declines – as we always thought to be the case under Greenspan,” he continued. “I’m not saying, ‘Mr. President, stare at the Bloomberg quote machine and come to your senses. I just want some sign that Obama realizes the market is totally falling apart and his agenda has a big hand in that happening.”
Cramer was highly critical of the Obama administration for not catching on thus far. He questioned the merits of their abilities to contain the market turmoil and wondered if they were even bothered by it.
So what has happened in the last two months? The economy has received no great new outside shock. Exchange rates and other prices have been stable, and there are no security crises of note. The reality of a sharp recession has been known and built into stock prices since last year's fourth quarter.
What is new is the unveiling of Mr. Obama's agenda and his approach to governance. Every new President has a finite stock of capital -- financial and political -- to deploy, and amid recession Mr. Obama has more than most. But one negative revelation has been the way he has chosen to spend his scarce resources on income transfers rather than growth promotion. Most of his "stimulus" spending was devoted to social programs, rather than public works, and nearly all of the tax cuts were devoted to income maintenance rather than to improving incentives to work or invest.
His Treasury has been making a similar mistake with its financial bailout plans. The banking system needs to work through its losses, and one necessary use of public capital is to assist in burning down those bad assets as fast as possible. Yet most of Team Obama's ministrations so far have gone toward triage and life support, rather than repair and recovery.
AIG yesterday received its fourth "rescue," including $70 billion in Troubled Asset Relief Program cash, without any clear business direction. (See here.) Citigroup's restructuring last week added not a dollar of new capital, and also no clear direction. Perhaps the imminent Treasury "stress tests" will clear the decks, but until they do the banks are all living in fear of becoming the next AIG. All of this squanders public money that could better go toward burning down bank debt.
The market has notably plunged since Mr. Obama introduced his budget last week, and that should be no surprise. The document was a declaration of hostility toward capitalists across the economy. Health-care stocks have dived on fears of new government mandates and price controls. Private lenders to students have been told they're no longer wanted. Anyone who uses carbon energy has been warned to expect a huge tax increase from cap and trade. And every risk-taker and investor now knows that another tax increase will slam the economy in 2011, unless Mr. Obama lets Speaker Nancy Pelosi impose one even earlier.
NEW YORK (CNNMoney.com) -- A poll released Thursday found that a majority of Americans believe that President-elect Barack Obama can fix the economy.
According to a CNN/Opinion Research Corp. poll, 76% of Americans said they believe it's likely that Obama will improve economic conditions.
In addition, 73% of those surveyed said they believe that Obama will bring stability to the financial markets
Tonight Barack Obama ended his interview with CNN’s Anderson Cooper with these words:
“Right now I’m learning an awful lot about the economy.
I’m not a trained economist, but I’m spending a lot of time thinking about that so that I can make the very best decisions possible for the American people.”
Really, you gigantic, colossal hypocrite? “Learning an awful lot about the economy”? “Not a trained economist”? Pardon my language, but just where the hell was all that modesty and honesty when you were tearing out John McCain’s throat for his similar admission offered at a time when people were making up their minds and when that little bit of honesty was most important?:
Originally posted by Stormdancer777
I am starting to think they want the collapse of America.
Clearly, there are forces that have been working for more than a hundred years to bring to bear Marx's predictions about capitalism. There are very many of those kinds of people in our country and quite a few in government, I fear.
Originally posted by theWCH
I'm actually a bit surprised that a whopping 24% think that he can't fix the economy, and that 27% think that he can't bring stability to the markets. So one quarter of our population thinks we're FUBARed.
[edit on 4-3-2009 by theWCH]