Newsweek's Gross on Blaming Obama for Lack of Market Confidence: That's 'Absurd'
Another day into the new era of Obama in
Since President Barack Obama took office on Jan. 20, the Dow Jones Industrial Average (DJIA) has lost more than 1,000 points. The cover story of the March 9 issue of BusinessWeek contemplated Obama’s role in this. However, Ben Steverman, a reporter for BusinessWeek said the mantra “Hope and Change” may have set the bar too high for the new president.
CNBC’s Steve Leisman, on the March 5 airing of “CNBC Reports” asked Steverman if it was fair to blame Obama for the current lack of market confidence.
“Probably not,” Steverman said. “I think – this is really a story about the stock market and how it’s reacted to Obama. And, expectations were really high and, and I’m not sure that he was ever going to be able to fulfill them as such. When Geithner was named as the Treasury pick on Nov. 21, stocks rebounded from the lowest level of 2008, up 15 percent the next day and a half.”
Steverman noted that some stock prices reacted by going up to unsustainable levels on the news of Obama’s policy proposals, especially Caterpillar (NYSE:CAT).
“Caterpillar, when all this talk about the stimulus package was going on, Caterpillar, which makes construction equipment, was up 40 percent in just about a month and a half,” Steverman said. “Those expectations were never gonna be met.”
Newsweek’s Daniel Gross dismissed the notion that Obama could possibly be playing a role in the current market turmoil. However, he did mention that his magazine, Newsweek, had considered blaming the current “depression” on Obama.
“I think it’s absurd to blame Obama for this,” Gross said. “Of course that said, we were kicking around an idea at Newsweek, of you know – ‘Is this Obama’s Depression?’ So that like giving him ownership already and extrapolating this from a recession to a depression. This is what news magazines do. It’s how we roll.”
Despite giving Obama a pass on the psyche of the market, Gross criticized the Obama administration for not having a Treasury Department staff in place as reports surface it can’t keep pace with the current woes due to understaffing.
“It is still inexplicable to me why there is not a fully-staffed Treasury Department,” Gross said. “The transition and the Obama administration, especially when it came to financial issues, didn’t start Jan. 21, they started Nov. 5. Because, they were in there during the transition and to not have a team ready to go on day one, to me is very strange.”