Friday, November 07, 2008

Obama's Immediate Priority

The stock market has taken a sharp lerch downward since Tuesday's elections, with the Dow Jones having lost approximately 1,000 points in the last two days. Some pundits on the right are suggesting that the sharpest post-election drop in the nation's history represents Wall Street's too late estimation of the results of the presidential election.

The economy is on shaky ground otherwise, and the stock market has been extremely volatile over the last two months, so it is not unreasonable that Democrats have suggested that the election of Barack Obama is not to blame for the downturn of the last two days. On the other hand, Wall Street is well aware that the President elect has previously promised to "bankrupt" the coal industry, which puts the coal industry in only a slightly worse position than what President elect Obama has pledged to do to the rest of the energy industry, the financial services industry, the health care industry, the import and export industries, and those making top end salaries in all industries. I am sure that there are others I am leaving out

The Obama team needs to get aggressive in response to signal where his administration is headed. Indications are that the new President does not intend to unveil his high level appointments immediately, but that is a mistake. To reassure the markets, he needs to immediately make public his intentions regarding Treasury Secretary and other key appointments. Those appointments must demonstrate that, at most, his will be a center left administration, not a radical left one. The combination of responsible appointments and policy positions that represent a more centrist position can help calm down market concerns.

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