President Obama, The Economy and 2012

Everyone makes mistakes. Heck, I even made one a few days ago during my last blog. Well, not a mistake exactly, but perhaps I should have done a little more homework. In discussing the Standard & Poor’s fallout, I quoted Berkshire Hathaway CEO Warren Buffett who suggested that S&P had made a poor decision in downgrading the U.S. credit rating. What I failed to mention, what I failed to know was that the billionaire is a major investor in S&P’s rival, Moody's. As a result, taking Buffet’s comments as somehow all knowing was a bad choice on my part.

Now, why even mention all this? Because President Obama did the same thing! For those tuning in on Monday to listen to the President’s speech, you may recall he too quoted Buffett in regards to Standard & Poor’s. Both of us were wrong to do so but at least that’s where I stopped, not the president though. He continued on, and stocks slid some more. The President then told weary investors who were glued to their sets that there wasn’t much more discretionary spending left to cut. So, stocks tanked some more. Then he told us that raising taxes on rich people is still a goal of his administration. So stocks sunk again.

Monday’s speech was troubling for a number of reasons, including the president’s apparent lack of understanding on just how urgent the matter was. Keep in mind the speech was supposed to take place at 1PM but it was pushed back. Then it was pushed back again past 1:30PM. Finally, we saw the president take the podium at close to 2PM. An hour delay is not exactly the end of the world but with stocks sliding and a country turning to Washington for answers, where was the President of the United States?

Again, maybe he just didn’t know what to say. Blaming the tea party, well that would have been a dumb thing to do again. Blaming the math skills of S&P, well that wouldn’t worked since it didn’t work the first time the White House gave that one a whirl. Maybe he should have tossed George W. Bush out there, blamed him again. That’s always good for some applause.

The bottom line is this. Investors are coming to the realization that President Obama may be incompetent. A friend of mine, a bond trader who knows his stuff believes the President is obsessed with his own political interests to the exclusion of those who disagree. That’s just one man’s opinion of course, but when I asked him what he thinks the President can do to calm the jitters, his answer was quite direct:

“If President Obama wants to help stabilize the national and international markets, he could do so tomorrow by announcing he won’t seek re-election in 2012. That would give all of us the shot in the arm we need.”