The day after President Obama’s big news conference, and on the day Treasury-man Tim Geithner unveiled his Bank Bailout Nation TARP III Plan, stock markets plunged in a vote of no-confidence, with the Dow dropping nearly 400 points.More....
Obama got the ball rolling by painting a dismal picture of the U.S. economy, saying recovery won’t arrive until 2010 at the earliest. He then said only big-government spending can jolt our economy back to life. He also bitterly attacked supply-siders and the Bush tax cuts, especially “tax cuts that are targeted to the wealthiest few Americans.” He added that these strategies have “only helped lead us to the crisis we face right now.”
You can say a lot of things about President George W. Bush’s big-government mistakes. But blaming the Bush tax cuts for the credit-crunched downturn is utter nonsense. It’s ideological politics at its worst. (It’s worth noting that while Obama was trashing supply-siders on Monday night, Scott Rasmussen’s latest poll showed 62 percent of U.S. voters wanting the stimulus plan to include more tax cuts and less government spending.)
Later in the news conference, Obama acknowledged how businesses that suddenly couldn’t get credit pulled back on their investment and laid off workers — workers who then cut back on their spending. That — along with the Fed’s stop-and-go monetary policy and a huge oil shock — is much closer to the true cause of this recession.
This is all most strange. Obama’s attack on supply-side economics would rule out the successful Kennedy-Johnson tax cuts that spurred growth in the 1960s and the Reagan tax cuts that ignited growth in the 1980s. Even Bill Clinton cut the capital-gains tax. And George W. Bush’s tax cuts helped generate a six-year economic expansion before the oil shock and credit crunch took hold.
On Tuesday morning, stocks opened down about 75 points in the wake of Obama’s pessimism. But stocks really started to tumble when Tim Geithner stepped to the microphone. He totally bombed in his debut.
Let's not forget that Geithner ran the NY Fed. He had his hand on the pulse of all this financial meltdown. Either he was too dumb to notice or too much of a wimp to call it out. Either way we're screwed.