By Phil Fraietta
Secretary of State Hillary Clinton said it best, when talking about President Obama’s image during the campaign season, "The sky will open. The lights will come down. Celestial choirs will be singing and everyone will know we should do the right thing and the world will be perfect!"
The President was able to convince the American public he was the man to save the nation, and the liberal media quickly gave President Obama a Messiah-like image during the 2008 campaign season. But, as President Obama is starting to find out, words of “hope” and “change” may mean something to the American public, but they mean very little to investors.
The Dow Jones Industrial Average and the S&P 500 both hit their lowest marks since 1997 on Monday. This coming just six days after the President signed into law his stimulus bill that was supposed to be the immediate fix to the economy.
Now it is certainly true that fiscal stimulus is not an overnight thing, and the stock market is never the best way to evaluate an economy, but with that said, the collapsing market is a sign that investors are not fooled by President Obama’s rhetoric and are fearful his stimulus package will fail.
Much to the surprise of President Obama, his speeches have been unable to provide confidence for investors. What the President must realize is that investors aren’t your average everyday Americans, amazed at the concept of “hope” and “change,” but rather, they are professionals. They are people with high-level degrees who understand the economy and what it means for the financial sector.
As I’ve said over and over again, if the President wants to turn around the trend on Wall Street, the most effective way to do so would be a cut in the capital gains tax. This would entice investors to put their money into a poor market with the prospect of seeing high returns at a very low taxation rate.
What we can all agree on is the key to turning around this recession is to increase consumer confidence and to do so by correcting the tailspin the stock market has seen over the past few months. What we disagree on, however, is how we can do that. President Obama seems to think he can simply speak and fool investors into believing the Savior will take care of things. In reality, however, investors want to see a sound economic plan, one that includes capital gains tax cuts, rather than more leftist rhetoric.