Given the complete collapse in the Stock Market – and Wall Street’s obvious vote of ‘no confidence’ in the new administration, it’s funny to read the plan that Barack Obama laid out for himself just two months ago:
…but the markets are obviously a slightly different situation. Right now, given the sensitivities of the market, I’ve got to pay some attention to market psychology because part of what we have right now is such a loss of trust in both the marketplace and in government that restoring that confidence, restoring that trust is going to be very important. I’m not going to part of watching the crawl at the bottom of an interview. What I will be doing is making sure that I’m communicating with key market participants on a regular basis, again, to explain to them what exactly our plans are and to solicit from them good ideas.
So Obama recognized that the success of his agenda rested to a significant degree on his ability to convince Wall Street that he understood the market, and had a plan they saw as workable. It’s hard to believe that was just 8 weeks ago.
Since then we’ve seen the confirmation of a tax cheat Treasury Secretary who was indispensable specifically because he would be able to enhance confidence on Wall Street. Liberated from the Fed, Geithner now seems woefully unprepared to convince the markets that Obama has a plan to restore economic growth. He was forced to trot out a bank rescue plan that was completely reworked in the last few days before it was announced — without input from the market. Even now — 4 months after Obama was elected — Geithner has not even named a single one of his top 17 assistants — let alone gotten them confirmed by the Senate!
This is an embarrassment. Obama swore up and down that his top priority was getting the economy back on track, but he blew his Treasury pick, and hasn’t even gotten him a single deputy to help bear the load. His plan is seen as worse than useless by the markets. Given all that, it’s no surprise that there’s a nascent move to fire Geithner. (And you better watch out Tim; there’s always more room under the Obama bus.)
Of course, asking Geithner to sell the Obama economic plan to Wall Street is like asking Colonel Sanders to convince chickens of the merits of his restaurants. The private sector now recognizes what might not have been apparent in January: that all Barack Obama offers is more government: more federal programs, higher taxes, more regulation, and eventually high inflation rates. There’s no way this plan could make Wall Street optimistic; it’s no wonder it has done the reverse.
Was Barack Obama smoking something when he spoke in January about the need to recognize the fragile psyche on Wall Street, build confidence and do a little hand-holding? He has ignored the problem – forcing through Congress a massive spending bill that even he now admits won’t do all that much to turn the economy around, instead of making a genuine effort to promote private-sector economic growth. And now that the markets are speaking clearly on the wrongheadedness of Obama’s efforts, he has only himself to blame.