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Buy the Rumor, Sell the News
Posted By Rory Cooper On February 27, 2009 @ 5:46 pm In Ongoing Priorities | 22 Comments
Americans have long viewed the Dow Jones as an index of measure when it came to the general economy. While it is by no means a perfect measure of the economy, it sits in its own highlighted box on all of the major news channels for a reason. Because Americans assess our economic strength by this average, it may be telling to see how it performs in certain situations.
Earlier this week in The Hill, Dick Morris said of President Obama :
President Obama, in his pursuit of liberal big-government spending, has totally neglected the role of the president of the United States in reversing global panic. To the contrary, his every remark and the constant preoccupation of his Cabinet is to heighten the sense of crisis and to escalate the predictions of doom if we do not do as they tell us and raise spending now and taxes later. Instead of being a firewall, reassuring Main Street even as Wall Street crashed, he has become a conduit of panic, spreading the mood of desperation from the stock exchange floor to kitchen tables across the world.
This was interesting, because enough time has elapsed since President Obama was elected, sworn in and with a couple signature measures under his belt to see the effect his policies are having on the economy. And what better way than to see how the Dow Jones Industrial Average  has reacted to some of his biggest days since taking office.
Now, this type of data runs the risk of cherry-picking. So, in 2008, the Dow under President Bush averaged a loss of roughly 86 points per week. Since taking office, the Dow under President Obama dropped 1,217 points and has averaged a loss of approximately 202 points per week, or roughly 43 points per trading day. This is a rate approximately 2.5 times greater than under President Bush last year.
So, it would lead some to believe that Wall Street, investors and American consumers are not responding to President Obama’s tax and spend philosophy.
So, having inherited a recession, his words are creating a depression. He entered office amid a disaster and he is transforming it into a catastrophe, all to pass every last bit of government spending and move us a bit further to the left before his political capital dwindles.
It appears the right solution for America may be less speeches by the Obama Administration, and more reassurances that the future isn’t all taxes, spending and deficits. That type of language would be a great step to recovery.
Article printed from The Foundry: Conservative Policy News Blog from The Heritage Foundation: http://blog.heritage.org
URL to article: http://blog.heritage.org/2009/02/27/buy-the-rumor-sell-the-news/
URLs in this post:
 Dick Morris said of President Obama: http://thehill.com/dick-morris/its-obama-spreading-panic-2009-02-24.html
 Dow Jones Industrial Average: http://finance.yahoo.com/q/hp?s=%5EDJI&a=9&b=1&c=1928&d=1&e=27&f=2009&g=d&z=66&y=0
 speech on the credit markets: http://money.cnn.com/2009/02/10/news/geithner.questions.fortune/
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