Dow Greets President Obama with Worst Ever Inauguration Day Drop
Mark Impomeni
Contributor
Posted:
01/21/09
Wall Street suffered its worst ever Inauguration Day slide yesterday as the Dow Jones average lost more than 300 points to close the day just above 7900, its lowest level in two months. Investors were generally not caught up in the euphoria surronding the inauguration of President Barack Obama, as continuing fears over the health of the nation's banking sector triumphed over hope that the incoming Obama Administration would right the economic ship.
Concerns over the new president's plans for the economy doubtlessly also weighed heavily on investors' minds. President Obama inherits an economy that has shed more than 3 million jobs since the Democrats took control of Congress in January of 2007. His administration's prescription for the economic malaise could make things much worse. Larry Summers, new Chairman of the National Economic Council admitted earlier this week that the Obama Administration would be satisfied with keeping the unemployment rate below ten percent. That would mean the loss of up to 4.5 million more jobs before any improvement could be expected. And Democrats in Congress are quietly bidding up the Obama Administration's proposed economic stimulus package, which price tag stands now at $825 billion. Some Congressional leaders are calling for a bill totalling almost double that number, a staggeringly high $1.4 trillion in new government spending. With the federal budget deficit already projected to top $1 trillion, adding a mountain of more public debt on top of the pile is likely not comforting to investors.
With the crowds gone, the soaring rhetoric uttered, and the television schedule returned to normal, President Obama must now begin to govern. Wall Street is not optimistic about the prospects for economic recovery, as judged from yesterday's poor showing for the new president. President Obama pledged during the campaign to listen to good ideas from anyone in service of making government work for the people. To that end, Republicans in Congress have crafted their own stimulus plan, which contains proven measures to get job creation back on line. With investors seemingly rejecting the Obama Asministration's and Congressional Democrats' plans to fix the ailing economy, President Obama may want to take a look at what the Republicans have to offer.
Concerns over the new president's plans for the economy doubtlessly also weighed heavily on investors' minds. President Obama inherits an economy that has shed more than 3 million jobs since the Democrats took control of Congress in January of 2007. His administration's prescription for the economic malaise could make things much worse. Larry Summers, new Chairman of the National Economic Council admitted earlier this week that the Obama Administration would be satisfied with keeping the unemployment rate below ten percent. That would mean the loss of up to 4.5 million more jobs before any improvement could be expected. And Democrats in Congress are quietly bidding up the Obama Administration's proposed economic stimulus package, which price tag stands now at $825 billion. Some Congressional leaders are calling for a bill totalling almost double that number, a staggeringly high $1.4 trillion in new government spending. With the federal budget deficit already projected to top $1 trillion, adding a mountain of more public debt on top of the pile is likely not comforting to investors.
With the crowds gone, the soaring rhetoric uttered, and the television schedule returned to normal, President Obama must now begin to govern. Wall Street is not optimistic about the prospects for economic recovery, as judged from yesterday's poor showing for the new president. President Obama pledged during the campaign to listen to good ideas from anyone in service of making government work for the people. To that end, Republicans in Congress have crafted their own stimulus plan, which contains proven measures to get job creation back on line. With investors seemingly rejecting the Obama Asministration's and Congressional Democrats' plans to fix the ailing economy, President Obama may want to take a look at what the Republicans have to offer.