The president did not offer any specific stock tips, but suggested that he believed the market might be close to its low point.That first sentence better have been a lame, inappropriate joke from the Times reporter or else he really messed up. And if it was a joke, I personally don't think it's particularly funny that folks have lost more than 10.4 TRILLION DOLLARS in wealth in less than 2 years.
“Profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal,” Mr. Obama said, “if you’ve got a long-term perspective on it.”
The second point I'm sure comes without the slightest bit of self-interest as is the case with most politicians because although he denies that he looks at "day to day gyrations" it sure must be unpleasant to be looking at "day to day massive losses in potential tax revenue" for any politician. He better hope it's near its low point or else we may make Iceland's financial implosion look pretty good before too long.
What may be much more troubling for Obama is that when folks like Paul Krugman constantly invoke the Great Depression, this current crisis is different in two ways. First, it's not nearly as horrible in terms of lost value. Second, the long bear market from the Great Crash of 1929 till 1932 ended in the summer of 1932 when it was clear the country was going to get a new president. Instead this bear market seems to be getting much worse as the macro situation worsens (which is not his fault) and responses to his plans fall flat (which, much as the Dems want to deny it, is now his responsibility). Someone in a national media outlet is going to figure this out and wonder about the Audacity of Markets. How Obama responds then will be interesting to see.
The increasingly shrill references to the G.D. are becoming not only annoying but dangerous. The more these (inaccurate) comparisons are made, the more likely it becomes that they will come true. The biggest difference between the world of 1930 and the world of 2009 is that there is a lot more money sloshing around the planet than there was then. As long as the flow of capital and goods is not restricted, the world economy should be able to pull out of the recession. The real current danger is a repetition of an event in the G.D. Fundman doesn't mention: The Smoot-Hawley tariff of 1930.
ReplyDeleteAgreed - and that's why Gordon Brown and the Canadian PM both went out of their way to mention it during their meetings with him. Whether or not he'll listen is a whole other animal.
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