Friday, March 20, 2009

President Obama and the "Obama spring rally:" Standing here. wondering, which way to go . . .

Well that's how markets seem to feel in flat early morning trading today. That's also the first line of a gospel song by Thomas A. Dorsey, who wrote Precious Lord, beloved by Rev. King. Here it's sung by Mahalia. And really sung by Marion Williams.

I myself am standing here wondering, scratching my head at the morning's headlines and op ed pieces. The President may well feel the same way ("Stunned," he told Jay Leno, is how he feels about the
AIG Bailouts that have sparked national outrage.) The headlines are conflicted even polarized. Something is happening, a groundswell of hostility towards the likes of AIG and it's hardly conducive to generating anything like an informed consensus on the future of the American economy.

The polarizing headlines include the dollar plummeting in the face of global doubts about Treasury Secretary's Geithner's shock stimulus plan announced Monday. Yet what's obsessing most Americans? Geithner's supposed foreknowledge of the AIG bailouts. Yet Alan Greenspan is now coming close to seconding Nouriel Roubini's call to nationalize (put in receivership) the supposedly too-big to fail "zombie banks" - the very banks that the Obama administration has committed itself, irrevocably it seems, to bailing out at a cost of trillions.

On the op ed front, William Greider says that "Obama Told Us to Speak Out" but asks "Is He Listening"? Good question, but shouldn't Greider be asking if the nation's media are making it possible for the president to hear anything but outrage, whether populist or elitist? A friend just sent me Michael Wolff's Huff Post thrashing of Obama's Jay Leno appearance last night. Wolff says Obama is like Jimmy Carter: ineffective. I have my doubts about our President, but aren't there better ways for smart people to use their ink than this?

For substantive critiques of the Obama administration, read Mike Whitney's "Bernanke's Witness Protection Program." For more than a year, Whitney has been writing presciently about the magnitude of present crisis. Here's the kind of discourse that Obama and the American people need to hear and process:
Last week, investors backed away from Bernanke's TALF, even though the Fed promised to provide up to 95 percent of the funding (through low interest loans) to investors willing to buy distressed assets backed by student loans, car loans and credit card debt. The potential investors "objected to the level of scrutiny that dealers would have over their books, arguing that the dealers' rules attached too many strings. Dealers were saying they take plenty of risk to facilitate the program and need to be protected in situations where the collateral or the client made mistakes or wound up ineligible." (Wall Street Journal)
7 PM CST. Is talk like this too risky for prime time TV? Hell no. The Fast Money crew on CNBC made these very points today. If clarity and transparency are important to economic recovery, surely the American people are entitled to hear too.

Standing here wondering, which way to go / So much confusion down here below . . .

Today, launching its "Future of Capitalism" Series, The Financial Times says that "The credit crunch has destroyed faith in the free market ideology that has dominated Western economic thinking for a generation. But what can – and should – replace it?"

9PM CST. The Dow closed down 122 today at 7,278, a bit shy of 300 points below its March 18 Obama/Spring market rally high of 7554. On the positive side, the lead story at the CNBC website says that "Home Sellers May Flood the Market Soon" now that the rate for a 30 year fixed loan, thanks to Geithner's shock stimulus, has fallen to 4.25% (I'm hearing 4.75% here in Glenview). BTW Martin Wolf of the Financial Times here discusses the stronger/weaker stimulus debate going on between, respectively, the US (Geithner) and Germany. And he sides with Geithner's strong stimulus position. Geithner will need all the help he can get if Mike Whitney reads the tea leaves right:
The TALF and the "Public-Private Partnership" are another slap in the face of the international community. They violate the spirit and the letter of the G-20 communique. It will be interesting to see if foreign holders of US Treasurys endure this latest insult in silence or if there's a sudden stampede for the exits. There's a sense that the world is getting fed up with the Fed's financial chicanery and would like to chart a different course. Enough is enough.
Definitely not want the world wants to hear before the big April 2 G-20 summit in London. What's more, most Americans are oblivious to this meeting's importance. Background is here, here, here, and here. As a nation, we have our heads in the sand, do we not? A correctable problem, to be sure, but only, as I keep saying, with the aid of a compelling, prime-time civic media.

Standing here wondering, which way to go / So much confusion down here below . . .

What's confusing me now is NOT these problems, but how hard it is to find a way to win support for a media that will enable America to solve them, as a people. A unifying media that will help 300 million people think (more or less) with one mind. Isn't it time we got to work on this? Maybe, I hear a voice saying, after the NCAA. Myself, I hear the President, while defending his embattled Treasury Secretary, saying "I don't want to quell anger, what I want to do is channel anger in a constructive way." This is not a task for the pundits on Meet the Press or Face the nation on Sunday mornings. It's not a task for the nation's (mostly failing newspapers.) It is, rather, a task for all print and electronic media. It's time for the media to channel this anger constructively on intelligent prime time reality TV. That, in a word, is the business model that the nation's media and the nation itself are looking for. In an age of convergence like the present, these two are inseparable. So far, if I had to pick a success story, I'd say CNBC, for all its faults, is coming closest to doing the job of being a mediating media right.

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