The President Speaks and the Stock Market Plummets

August 8, 2011

S&P downgraded U.S. long-term debt from AAA to AA+ late Friday night, the first such downgrade in our nation’s history. The ratings downgrade was yet another condemnation of the out-of-control spending by this administration, which has tripled the deficit in only two and one-half years.

The President was oddly silent about the S&P action over the weekend, not even mentioning the downgrade in his Saturday morning radio address. Instead, the administration sent its propagandists to the Sunday news shows, carrying the message that the S&P downgrade was caused not by the spend-like-a-drunken sailor administration which has run up the public debt to a mind-boggling 72% of the gross domestic product, but instead was caused by … get this … the Tea Party. How stupid do they think we are?

The market reacted predictably to the downgrade, plummeting over 200 points in the morning trading session. With no fundraisers on his schedule until later this evening (when two are on tap), Mr. Obama determined to take firm and decisive action. He would make another speech.

For an administration whose profligate spending is driving our nation into insolvency, these frequent teleprompter reads by Mr. Obama are being met with increasing skepticism by the financial community.

The President began today’s statement by pronouncing that the S&P downgrade was “not so much because they doubt our ability to pay our debt if we make good decisions, but because after witnessing a month of wrangling over raising the debt ceiling, they doubted our political system’s ability to act.” Who could doubt the administration’s stalwart handling of the economy? Clearly, the downgrade must be the fault of those who dared to question the President’s ability to spend us into oblivion. Yes, the Tea Party is to blame. Say it enough times, say it with conviction, say it with professorial certainty and a gullible public will believe it.

The President continued, “We didn’t need a rating agency to tell us that the gridlock in Washington over the last several months has not been constructive, to say the least.” Yes, while the Democrats had overwhelming majorities in the Senate and the House, plus the Presidency, we got such “constructive” things as Obamacare, Dodd-Frank, and an $800 billion failed stimulus. How are these working out? If not for the voters saying “enough is enough” and electing a majority of Republicans in the House – unfortunately only half of one branch of government – who knows what additional “constructive” things the economic whiz kids in the White House would have done.

And lest you think that the administration’s out-of-control spending is at all to blame for our fiscal crisis, and just in case you missed him the first time, the President continued to cast blame on those who would seek to deny him a carte blanche with taxpayer’s money. “We knew from the outset that a prolonged debate over the debt ceiling — a debate where the threat of default was used as a bargaining chip — could do enormous damage to our economy and the world’s.” So, let’s get this right. It is the threat of default, rather than the cause of default, that does enormous damage to the economy? And these are the people we should trust to run our economy? Again, how stupid do they think we are?

And always quick to pass the buck and blame the nation’s economic woes on anything but this administration’s own inept stewardship of the economy, the President went on to attribute the recent market collapse and nation’s anemic growth to the “threat [of default -- caused by the Tea Party, of course], coming after a string of economic disruptions in Europe, Japan and the Middle East, has now roiled the markets and dampened consumer confidence and slowed the pace of recovery.” This buck-stops-there administration never takes responsibility. Never.

And making it clear that he’s no ideologue, the President distinguished himself from those who are too stubborn to compromise: “it’s not a lack of plans or policies that’s the problem here. It’s a lack of political will in Washington. It’s the insistence on drawing lines in the sand, a refusal to put what’s best for the country ahead of self-interest or party or ideology. And that’s what we need to change.” This from a President who during the discussion of possible spending cuts (to which he was dragged kicking and screaming), declared off-limits the $1 trillion health-care reform, $128 billion in unspent stimulus funds, $53 billion in high-speed rail funding, student loans, and “green” jobs among other ideological pet projects. Again, no ideology on the part of this President.

The President went on to use some filler from his previous empty jobs speeches, renewing his push for another payroll tax cut (we did one back in December and we’re still at a 9.1% unemployment rate) and for extending unemployment benefits. The President added this whopper: “In fact, if Congress fails to extend the payroll tax cut and the unemployment insurance benefits that I’ve called for, it could mean 1 million fewer jobs and half a percent less growth.” Huh? The speechwriters outdid themselves with the crafty wording on this one. Let’s see. Mr. Obama is not promising 1 million more jobs or a half percent rise in GDP. But if Congress does not extend the payroll tax cut and continue unemployment benefits, they, and not the President or his policies, will be to blame if the economy loses another 1 million jobs and the GDP drops another half a percent. Such a sentence can only be read by one with contempt for the intelligence of his audience.

Oh yes. The President went on to re-propose that old chestnut of further investment in infrastructure (some of those phantom shovel-ready jobs missed by the 2009 stimulus no doubt) as the final piece of his fix-the-economy solution.

In other words, this administration doesn’t have a clue how to fix the economy, and is proposing more of the same from its initial, profoundly destructive, two and one-half years in office.

But CNN was apparently impressed. They reported: “President Barack Obama presented a reassuring assessment of the U.S. economic situation Monday, calling the country’s problems “‘imminently solvable’.”

The markets were less impressed, plummeting with each platitude pouring from the President’s mouth. The Dow closed down 635 points on the day, while the Nasdaq lost an even more whopping 175 points. The S&P 500 is now down about 16% since July 22, as the markets have lost all confidence in the ability of this administration to control its spendthrift ways.

Please, please, Mr. President. No more reassuring assessments. Please stop doing to our 401Ks what you have already done to the nation’s economy.

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