Why Wall Street Razzed Obama

Wall Street congratulated our new President yesterday: the Dow Jones fell 332 points. Was it because he is a Democrat? Stocks historically did better under Democratic presidents. Because he is planning to raise some taxes, eventually? Wall Street knew it all along. This is about something which became known yesterday, during the inauguration.

Maybe this: the "new era of responsibility"? Maybe Wall Street thinks that the President really means it and instead of throwing as much money as the Fed can print at the problem, he'll start counting it?

Responsibility is good. But it won't fix our current mess. Whatever multiple Japanese governments did in the 1990s, they were not irresponsible, it just wasn't enough. We are in Great Depression 2.0, and the only way out is to print money and spend it. If deflation takes hold, it will be too late. Mr. President, please instruct Treasury to work with the Fed to throw more money into the system. Uncle Ben knows that we need it, he'll do his part. Right now I don't even care if this money is spent on some good projects or just thrown down from helicopters on poor neighborhoods. Whatever is necessary to increase the amount of money in circulation, not on bank reserve accounts.

Let's be irresponsible. Let's spend tons of money, for good or not, and defeat deflation while it's still a baby. Just drown it in money!

Comments

[Tradememe:]

Yeah, and why don't you start printing 100 trillion dollar notes ?

Jan 21 04:57 AM

[morph366:]

You say - "Let's be irresponsible etc." Don't you think we have had enough of that attitude already?

Jan 21 05:03 AM

[Daniel J Sw...:]

We are in a different situation this time, far worse than the Great Depression. It is the end of the Industrial Era. We are going to be forced to cut spending or say goodbye to our dollar, because we will face very stiff inflation as soon as the economy begins to turn toward growth. This time it's about energy. www.energystrain.com

Jan 21 05:43 AM

[john s. gordon:]

yes we've had too much irresponsibility during the last 8 yrs.
> jack

Jan 21 08:13 AM

[msoori:]

"Responsibility is good. But it won't fix our current mess." Wow, that sounds like a teenager talking! Drink more to get sober, spend more to solve the financial crisis! Lets all go out and get more debt so we can fix this economy! If that was good for the government for the past government, it should be good for us too!

Jan 21 08:13 AM

[Insiderman:]

I took this to be a tongue in cheek editorial.

I think the real reason Wall St. cratered on inauguration eve was because no one wants money on the table when a million people in a 3-mile mall area could kill the guy.

Jan 21 08:42 AM

[robert.b.fe...:]

FDR tried this and found that this policy is a one trick poney.

Jan 21 09:01 AM

[Old Wizard:]

This article can't be serious. I agree that the Federal gov should spend money that it doesn't have because it's the lesser of two evils. this is a golden opportunity, however, to invest wisely in America's future. The two headed threat to our future is the burgeoning negative operating cash flow of the country as measured by the current account and our dependence on foreign hostile regimes for much of our energy supply. Luckily both of these problems can and should be addressed by focused and timely[like now] investments. By establishing near and far term measureable goals for oil import reduction and implementing a plan that achieves these goals will require an investment on the order of 300 to 500b.. The plan should include large scale pilot projects for three wind farms, 2 to 3 solar farms ,the infra-structure modifications to deliver and store the energy and the purchase of right aways. The plan should also include the building of at least two monorail spider networks for two suburban/city metroplexes using existing highways and roads as rightaways. Also in the near term the plan should include the conversion and /or purchase of all scool buses, state and municiple vehicles to natural gas and the provision of natural gas to their garages, off-shore drilling in known reserves and in the longer term twenty to thirty new nuclear plants, Clean coal and hydrgen cell car investment in research and reduction to practise investment shoul also be increased. These kinds of investments will surely create jobs that have staying power, go a long way to solving our cash flow problem and reduce our dependency on foreign oil and ,oh by the way, reduce greenhouse emissions. The idea that we should build new roads and spend the money on things mostly manufactured elseware without addressing our most pressing problems bodes badly for our future and shows that our politicians are unable to solve our problems even when they are spending over a trillion dollars of money they don't have

Jan 21 10:45 AM

[tc1:]

The main reason the markets tanked yesterday had nothing to do with Obama but was surely because of Nouriel Roubini's bluntly worded and accurate assessment (reported by the Bloomberg news service) that our banking system is essentially "insolvent." Blame the crash on the toxic assets created by those very naughty boys on Wall Street the last decade, NOT on Obama!

Jan 21 11:17 AM

[DuffBeer:]

BHO past and present campaigning meant saying the very thing each and every audience he was telepromting to wanted to hear.
Now he has a real job and he has a democrat house and senate
majority. This should be very interesting as I recall another party
once had the same !!!!!
Spend Spend Spend " Every 100 years all new People "

Should be fun watching the Dems eat each other up while
trying to get at the $$$$$$
I just hope I can afford my beer !!!!
Cheers,
DuffBeer

Jan 21 11:38 AM

[kelm:]

This past weekend saw horrible news from the banking sector domestically and from Europe. Asian and European markets were already strongly down before we opened or Roubini said anything. Tuesday was the first opportunity to sell and so they took it. It had nothing to do with Obama. Roubini isn't saying anything dramatically new. His interviews in December stated this would be a horrible year in banking and the economy. The only new thing is our domestc press is paying more attention to him now.

Jan 21 01:23 PM

[sylviechen:]

credit swaps, credit swaps, credit swampland, that's the reason...

Jan 21 10:51 PM

[omanmike:]

When Wall Steet goes up and down has nothing to do what we insignificant mortals do. It's already embeded into the imformation stored in the collective consiousness of the universe, which is never lost. Comprende? Of couse not.

Jan 21 10:55 PM