Mixed Message from Obama
Posted on February 23, 2009
Last week, the President signed into law the largest unbudgeted spending bill in our nation’s history.
This week, he held a fiscal responsibility summit, gathering business and political leaders to talk about the importance of spending less.
Next week, or the week after, he will sign on of the largest appropriations bills, which was included in last year’s budget.
Last week, he signed a bill that cut taxes (not by much and for a lot of people who don’t pay income taxes). Later this week, he will present a budget that will sharply increase taxes on people who actually pay taxes.
His Administration says that they don’t want to nationalize the banks. Then, one of his closest allies on the Hill, Senator Chris Dodd, says that nationalizing the banks is an option on the table.
This might seem like a bunch of mixed messages. But to investors, the message is clear. Get out of the market now.
It seems that each time the President speaks, the market drops. It dropped another 250 points or so today.
The market is now down to close to 7000, about 2500 points from when B.H. Obama was elected President.
The market has tanked partially because the fundamentals of the economy are not particularly strong. But it has also tanked because investors don’t agree with the direction that the President has charted.
CNBC reporter Rick Santelli captured that frustration when he asked the President on the floor of the Chicago Merc (rhetorically), “President Obama, are you listening?” Robert Gibbs, the President’s erstwhile Press Secretary, and then suggested that Mr. Santelli was over caffeinated.
But the problems with the market are not linked to caffeine. It is linked to a government that seemingly seeks to punish profit making, produce more government, promote more regulation, and generally pit class against class.
The President needs to change his message if he wants people to feel the confidence to invest again. He needs to embrace the investors, not scare them away.