Thursday’s job speech by US President Barack Obama is being called one of several defining moments of his presidency as the run-up to the 2012 presidential election gets underway. The focus of his new plan appeared to be three-fold, first was a repeated call for action by Congress, reflecting the impatient mood felt across America, with his repetitive statement for leaders to act “right away.”
Secondly, and perhaps most important, was his overriding emphasis on lower and middle class jobs in areas such as construction and teaching. A harkening towards the days of President Abraham Lincoln was intoned with a comment that America was one nation of rugged individualism that worked best on cooperative efforts, with emphasis on the latter. Noting that America was falling behind China in the construction of national infrastructure such as airports, highways and high speed rail lines, President Obama stated that such projects needed to become a priority in the months and years ahead.
The third aspect was a compromising note on tax cuts which saw Obama proposing a heavy emphasis on tax cuts for the middle class and tax breaks for businesses hiring individuals who had been unemployed for more than six months. A call to lift the Bush-era tax cuts on the super-wealthy was put forth, with hominy paid to the notion of fairness.
Overall, Obama’s speech seemed to begin slowly and reluctantly, with a sense of dragging on through his repeated calls for action, but it picked up towards the end as he tried to embody the message of past presidents. Whether successful or not will depend on the specifics of his plan and whether an agreement on it can be reached. Additionally, how financial markets have responded to this message appears mixed. With many other global factors coming into play, it is tough to tell what derives from Obama’s message and what is occurring as a result of today’s G7 Summit and other economic data releases.
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By Greg Holden
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.