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.”
Tales from the Trail
Fear returned to global financial markets today, with stocks sinking and the dollar rising sharply on renewed worries about an economic slowdown in China and the United States. President Barack Obama met with senior economic adviser Larry Summers and “talked through some scenarios” on what was playing out around the globe, and how to keep the U.S. recovery on track.