We noted a while ago that since it became clear that Barack Obama was going to be the next president the stock market has lost about 30% of its value. Investors are clearly assuming that Obama is going to make life difficult for business and they're getting out of the market while they still can. People are asking, "Where's Obama?" Why isn't he stepping forward to calm the markets with his soothing mellifluence?
We suggested that Obama could give the markets a jolt and reverse the downward plunge simply by promising that he has rethought his previous position and that in light of the current crisis he will not impose any further burdens on business and may even reduce them. We wondered further why he doesn't do this. One reason, of course, is that he really does want to raise the minimum wage, tax businesses more heavily, and pile more regulations upon their faltering backs.
Suppose, though, his advisors have prevailed upon him to dampen his enthusiasm for sophomoric socialism and to do the prudent thing to help turn around the economic nosedive. If so, would he announce his willingness to forego the imposition of onerous taxes and regulations now? Perhaps the Machiavelli in him reasons this way: "If I promise to create a business friendly environment now, the markets may respond enthusiastically and by the inauguration everything will be hunky-dory. Bush will get the credit for the recovery and I won't. On the other hand, if I wait until after the inauguration to goose the markets, it'll look like I have the Midas touch, when, in fact, all I did was promise not to do something I should never have promised I would do in the first place."
So, I might be completely wrong about this, but look for Obama to either wait until after he's in the White House or perhaps at least until after the holidays to announce that he's going to refrain from crushing business with any new taxes, etc. If he can make this sound credible, investors will start buying back in and the market will regain some of its former luster. Unfortunately for Obama, he'll lose a lot of luster in the eyes of his devotees on the left who'll be wondering what happened to the change that they believed in.
RLC
