Tales from the Trail
On Wednesday, President Barack Obama plans to announce his latest package of plans to stimulate the sagging U.S. economy, most of which are already known. It was hardly a surprise to see Republicans quickly positioning themselves to block the plans, but more disappointing to the White House must have been the cautious response even from the president’s fellow Democrats on the Hill, who simply said they were looking at the proposals. Even more damning, perhaps, was the verdict from the financial markets, which greeted the news with a big yawn. Both the Dow and the S&P indices ended the day more than one percent lower, dragged down by fresh growth worries in Europe. Economists on Wall Street said the plans would not do enough for small businesses or to solve the Democrats’ biggest economic and political problem: finding work for the 14.9 million unemployed. There are big questions, too, about how the plans will be paid for. “If he chooses to take away a corporate tax break to pay for this proposal, the net gain is zero,” said Andrew Busch at BMO Capital Markets. “This is likely why U.S. stocks are not seeing much of a bounce on the news.”
Just a few quick thoughts ahead of the Labor Day weekend. President Barack Obama plans to unveil a package of measures to stimulate hiring and the economy next week, although we are assured this will absolutely not be a second stimulus. I guess that means it won’t have a major price tag attached, in terms of its effect on the deficit. But you also have to wonder how much effect it will have on the economy, even if Obama manages to get any of it through Congress.
If rescuing the U.S. economy from the Slough of Despond wasn’t enough, President Barack Obama took a stab at finding peace in the Middle East today. Obama is determined to forge a new relationship with the Muslim world, and presumably would like to unquestionably earn the Nobel Peace Prize he was awarded last year. But getting embroiled in the Middle East is a risk for the president, not least because failure to reach an accord could set back his efforts to win over Muslims and achieve solidarity over Iran. Ordinary Israelis and Palestinians are not optimistic about this latest peace effort, and experts say the one-year deadline to reach a deal does not appear very realistic. Nevertheless, it is hard to argue with Obama’s opening remarks today, and his hope that “extremists and rejectionists” should not be allowed to derail the peace process.
A student in Pennsylvania offered President Barack Obama a way to boost the economy that probably hasn’t been on the table at the White House.
If it walks like a stimulus and quacks like a stimulus, is it a stimulus?