Terry Connelly is dean of the Ageno School of Business at Golden Gate University and is frequently quoted on business, financial, and economic issues by Bay Area local, as well as national, news media.
The message to the rest of America – younger and older; parents and CEO’s; teachers and technicians; Wall Street traders and cable commentators; bankers and bricklayers – was unmistakable: the future is ours if only we’ll
take responsibility for it.
The politics of the speech will sort out in due time and course; the precise words of the speech will fade in memory; but the music of the speech was intended to resonate for a while longer.
The President sought to explain to Americans how Government has a central role to play in getting us out of the economic hole we have dug for ourselves, especially in the case of the banking system. But there was an equivalent call for personal responsibility, especially for fathers and mothers. And there was a call for common sacrifice of pet projects by both Democrats and Republicans, and by the White House itself. The tests will come soon enough in the budget negotiations – to be followed quickly by debate on health care and the future of Social Security.
The Republican response sounded like it had been recorded before the President’s speech; it was noteworthy to hear Governor Jindal complain about a stimulus package passed without being read, as he responded to a speech he obviously hadn’t read (or if he did, he obviously plagiarized). Obama will be happy enough for Jindal’s modest echo of his praise of America’s potential.
It will be interesting to see if CNBC will again attempt to trash this articulation of Administration policy as insufficiently detailed to please the derivative traders that network has come to represent. This was not a speech for Wall Street but for Main Street, and Main Street will understand it: the President is being “doctor beat the recession” - his audience will understand that. Except for our financial institutions, America is on its way out of intensive care and on its way to the “recovery room”. As for the banks, it will take a while, but at least it looks like the “stress test” from this doctor will be serious business, and that there may be some banks put on Federal dialysis in the form of common equity.
Chairman Bernanke of the Fed indeed earlier said that the stress test is not “pass/fail” – any more than the traditional annual treadmill cardiogram simply concludes that if you’ve got cardiovascular disease, you’re going to die soon! The question is what does the test diagnose and prescribe: a pill, a bypass, or the paddles. Different banks will get different medicines.
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