The Corner

A Dow Unworthy of FDR

Who knows? Maybe the Dow will rally tomorrow, and here’s hoping it does. But so far the markets have greeted Obama’s program with a resounding thud. I have never thought that Obama’s rhetorical tone was making much difference one way or the other, that he was “talking down the markets.” The problems are much deeper than that. Indeed, after his resounding pledge of recovery last week in his quasi-SOTU, markets have continued to slide. Obama’s debut is quite different from FDR’s. FDR took office in the midst of a total meltdown of the banking system and acted boldly to arrest it. In March 1933, the Dow was at 52. It climbed 75 percent in the first 100 days. By December 1, 1933 it was 99. Obama is temporizing with his financial crisis in favor of moving quickly on his big spending plans, and watching the Dow trip steadily downward by the day. It’s as if FDR skipped the bank holiday and focused first on passing the CCC. The last day before Obama was inaugurated, the Dow was at 8,281. Today, it closed at 6,763. Two political points: 1) Every day the markets continue to slide, it makes it harder on Obama to blame the mess on President Bush and forswear any responsibility himself; 2) if I were Eric Cantor or John Boehner, I’d be talking about a “real recovery package” every day– payroll and corporate tax cuts, regulatory reforms for the financial and auto industries, relief for small business. None of it is going to pass, of course, but it will dispel the idea that they aren’t for anything and show they are zealous about trying to check the economy’s downward slide.

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