Are Obama’s policies responsible for the stock market slide?

Every now and then, the stock market exhibits irrational exuberance or pessimism. But these days, the market’s long-term trend is not irrational. For the first time since the Depression, events have aligned to create the very real possibility of something previously impossible: that the United States could fundamentally transition toward a more European welfare-state model.

“The market” is simply millions of decision-makers buying or selling based on future expectations. And they recognize a perfect storm when they see one. First, take vast economic upheaval and pain demanding attention. Second, add a popular new president with the “Old Keynesian” belief that solutions lie in major government spending and growth (where modern Keynsian models demonstrate limited impact of spending). Third, add the highly rare occurrence that both legislative bodies are of the same mindset with each other and the president, and the even rarer ability to veto most opposition to pass a radical restructuring into law. Finally, add the fact that this theoretical restructuring is no longer theory: the first steps are already being taken.

I ask: why wouldn’t the markets seem subdued? It was entirely logical for share values to descend from their October 2007 high, once we realized that our financial system had the cancer of securitized “nonconforming” loans that could never be repaid. Just as it was entirely logical for 2008 markets to recognize that we would probably have a President Obama – with a more European bent — dealing with our economic illness come January 2009.

Unfortunately, the European philosophy accepts there will be a permanent hit to business and employment because of the higher taxes needed to pay for higher government spending. For example, the Heritage Foundation’s James Sherk pointed out in an interview, Europe has averaged a 60 percent higher unemployment rate than America, and on average European workers remain unemployed more than 12 months compared to three to four months for American workers.

Presidents and policymakers should never react to day-to-day stock market movements, maintaining a long-term focus instead. But a true long-term focus will look to the past and recognize that U.S. affluence has been based on encouraging U.S. business and rejecting the European model. Yes, the economy is sick and we are working the cancer out of our system. But we shouldn’t risk killing the patient in the process.


Are Obama’s policies responsible for the stock market slide?

Since the conservative Washington Times announced “the honeymoon’s over” the day before Barack Obama took office, I suppose it only makes sense that the GOP 2012 game plan is to blame the president for a market slide that began its descent a full year before he came into power. Is the president turning us into — quelle horreur! — Europeans? Let’s take a closer look at just how much of this is Obama’s faute (that’s “fault”, for those of you still speaking English).

We know he didn’t invent the housing bubble or the credit crisis, we know he didn’t oversee the massive deregulation, all leading to the first large bailout on That Other Guy’s watch, and we’re pretty sure that the collective global economic meltdown isn’t his fault either.

In fairness, Obama is still learning how to walk that wobbly line that forces him to both chastise big business while he solicits our support in the government aid that might save it. Yet any inference that the market began to falter in anticipation of an Obama presidency is way off base. That was around the same time Lehman Brothers failed, WaMu was rescued and it literally looked like every bank in the country could go under. (I suppose the market rally the week before the election came because people suddenly decided John McCain had it in the bag? Hardly.)

These are uncertain times; it’s an era where a Comedy Central comedian feels more credible to us than an MSNBC analyst, where the once mighty GOP now turns, for direction and inspiration, to Jonathan Krohn, a 14-year-old with a knack for public speaking. No wonder political panic is rampant on the right. “Socialist” hasn’t had much traction; I can hardly blame them for throwing “European” against the market research wall, hoping the slur will stick.

Americans aren’t terrified of turning into Europeans; they’re rightly concerned about a deepening recession that impacts their lives on a daily basis. They have no trouble remembering and cherishing our proud capitalist roots, but you know what else sticks in their mind? That the perfect storm of events that brought us to this point has little to do with the leader we’re hoping will bring us to shore.

163 comments Add your comment

wencho

April 28th, 2009
10:56 am

well hello there sexy

Mara

March 27th, 2009
12:12 pm

A pregnancy involves two bodies, two lives. Why would you believe that only one of those two bodies, two lives would have civil rights?

1) no person should be forced to give up their health or well-being for the benefit of another.

2) when ‘life’ begins is completely subjective.

And who should be watching them? Our government? They should decide how much money I can make?

I don’t know where you came up with the conclusion that ‘regulated and watched’ equates to the government saying how much money you can make. But yes, I do think that certain business practices should be illegal and punishable by law. I also think that enforcing fair labor practices, enviromental safety, and trading practices is the purview of regulators as well.

Because religion is so diverse and divisive, it belongs in the church not in public policy.– Why?

Why?! Look at Iraq. Look at India. Look at Pakistan and the old Yugoslavia. Look at HISTORY! ANY state that elevates one religion over another, that uses religious tenets instead of the rule of law, that says to its people “This belief is good and all others are bad”, these states end up torn by violence, bereft of freedom of thought and action, crushed under totalitarian dictators, and rife with abuse and cruelty.

So you apparently forgot to chime in when others were saying that Bush was shredding the Constitution. He wasn’t shredding it, he was just letting it breath

There is indeed room for interpretation within the Constitution, but what Bush did was NOT interpretation. What HE did was violate the First and Fourth Amendments, co-opt the responsibilities of the Legislative branch, overstepped the power of his office, and used the tools of the State to intimidate dissent.

But you avoid subjects that call your ridicules stances out

When I do that, it’s usually because you have so misquoted and rephrased my opinions that it’d take *way* more effort to set the record straight than i want to put into a blogpost. And you seldom admit that you may have been mistaken in your understanding. For example, you’re STILL insisting that I did say that pornographers NEVER harmed children or exploited women…when what was said was probably something on the order of “mainstream pornography doesn’t feature underage girls or coerce women into posing…”

either way…I DO get tired of correcting your misquotes and deliberate mischaracterizations so…yes, I DO refuse to get into it sometimes…

The Other Jack

March 27th, 2009
10:36 am

Mara – a woman’s body is her own and she can, if she chooses, terminate a pregancy for ANY reason.

A pregnancy involves two bodies, two lives. Why would you believe that only one of those two bodies, two lives would have civil rights?

Mara – People should be free to do as they please (as long as it doesn’t harm the rest of us)

“Us” being the operative word. “them” or “IT” can be harmed at the whim of a woman, right?

Mara – but businesses and corporations need to be watched and regulated.

And who should be watching them? Our government? Our elected officials that are not professional business people, but the lowest form of human life: Politicians? Politicians should be watching my business? They should decide how much money I can make? Too bad some very wealthy limousine liberals haven’t been watched.

Mara – Because religion is so diverse and divisive, it belongs in the church not in public policy.

Why? And what has been the result of this stance over the past 25 years?

Mara – I believe that the Founders expected society to progress and built into the Constitution enough ambiguity to provide structure without restricting moral growth.

The Constitution as a living document, Huh? So you apparently forgot to chime in when others were saying that Bush was shredding the Constitution. He wasn’t shredding it, he was just letting it breath. But of course you hated Bush, so I guess the Constitution can only be alive if it is being driven by wise, kind people offering Hope and Change.

I don’t “get like this”. I’m like this every day that I need to deal with the double standards that liberals insist on. I’m like this every day when people like AW and you insist that churches are just as crime infested as slimy bars.

I think you are all good people, but I think you are indoctrinated. I think you are forbidden to think logically. I think you ignore logic and reason and any pointing out of historical parallels is strictly forbidden.

I don’t want to insult you. I like you and I like almost everyone here. But you avoid subjects that call your ridicules stances out. If I go back and find the exact wording to the porn stance (like I have already done for USinUK), what will your reaction be to a couple of hours of research? Will you even respond? I don’t think so.