Yesterday the President spoke and the markets tanked.
The speech also highlighted the growing divide between Washington and Wall Street, than anything else.
Washington remains fixated on debt and deficits after the contentious debt ceiling battle that brought on last week’s downgrade from Standard and Poor’s, markets are far more interested in the stagnant economy.
For Wall Street — and America — debt remains a concern, but one that will not rear its head for years. Unemployment and economic growth are far more pressing, despite being ignored by Washington policymakers.
A CBS/New York Times poll released last week showed that by a two-to-one margin most Americans want to see job creation take precedence over cutting spending.
Obama devoted much of his speech to the debt issue, calling for tax and entitlement reforms to deal with the nation’s growing debt burden. But Wall Street was not looking for more for talk about the “Super Committee” and deficit reduction at a time that it would undoubtedly slow the recovery.
His section on job-creating legislation to promote economic growth displayed no sense of urgency, even as the Dow dropped below 11,000 before his eyes.
Obama renewed calls for an infrastructure bank to create opportunities for construction workers, and an extension of the payroll tax break, which he said would save the economy about 1 million jobs. But these were not new ideas, nor would they take effect in the short term.
Asked after the speech if the Obama would call Congress back into session to tackle job-creation immediately, White House Press Secretary Jay Carney laughed at the question, and proceeded to give reporters a lesson on the different branches of government.
“We don’t control all levers of government. Sometimes that’s quite unfortunate,” he said.
Bringing Congress back wouldn’t be an instant panacea — obviously — but doing nothing conveys that he, and Washington, are out of touch.
With Congress and the Obama administration preoccupied with debt and who gets the blame for the downgrade, the disconnect between the priorities of Wall Street and Washington has perhaps never been starker.