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Obama's Bear Market

By Howard Kurtz
Washington Post Staff Writer
Wednesday, March 4, 2009 9:54 AM

It was 7:05 yesterday morning, on the floor of the New York Stock Exchange, when Jim Cramer shorted Barack Obama.

This wasn't Cramer the hothead, off on a rant about some stock. It wasn't Cramer the flamethrower, as I'd seen him behave as a hedge-fund manager, winning or losing millions within minutes, when I was writing a book about Wall Street.

No, the Mad Money man was calm and composed as he accused Obama of pursuing a "radical agenda." This, he said, "is the greatest wealth destruction I've seen by a president."

The reason this is noteworthy is that Cramer is a liberal Democrat who, for example, strongly backed his former Goldman Sachs colleague Jon Corzine for New Jersey governor.

I'm not sure it holds up to blame Obama for the market swoon five weeks after he inherited an economic disaster. But if Cramer is doing just that, the parameters of the debate are shifting.

You could see it at yesterday's Gordon Brown photo op, when Obama said that stocks were a good long-term investment. You could see it at the White House briefing, where ABC's Jake Tapper asked: "Is the president at all concerned that what he's selling, Wall Street just isn't buying?"

Despite these mounting woes, Obama "is more popular than ever, Americans are hopeful about his leadership, and opposition Republicans are getting drubbed in public opinion, the new Wall Street Journal/NBC News poll finds. . . . By a margin of more than 2-1, Americans trust the Democratic Party over the Republicans to get the country out of the recession." Obama is at 60; Michelle at 63.

So the polls are going in the right direction and the Dow in the wrong direction.

"President Obama said Tuesday that he is not intently focused on the 'day-to-day gyrations of the stock market,' comparing the downward roller-coaster on Wall Street to the fickle nature of political polls," the NYT reports.

" 'You know, it bobs up and down day to day,' Mr. Obama said. 'And if you spend all your time worrying about that, then you're probably going to get the long-term strategy wrong.' "

Now that Obama is pushing a $3.6 trillion budget, the battle lines are being drawn more starkly. Conservatives are crying big government -- and, let's face it, it's pretty big, with the feds expected to hire 100,000 new employees by some estimates -- while liberals say Obama was elected to change the country's direction and dig us out of this huge financial hole. But one person who's been a past admirer of Obama is now openly disenchanted. Take it away, David Brooks:

"There is, entailed in it, a promiscuous unwillingness to set priorities and accept trade-offs. There is evidence of a party swept up in its own revolutionary fervor -- caught up in the self-flattering belief that history has called upon it to solve all problems at once.

"So programs are piled on top of each other and we wind up with a gargantuan $3.6 trillion budget. We end up with deficits that, when considered realistically, are $1 trillion a year and stretch as far as the eye can see. We end up with an agenda that is unexceptional in its parts but that, when taken as a whole, represents a social-engineering experiment that is entirely new. . . .

"Those of us who consider ourselves moderates -- moderate-conservative, in my case -- are forced to confront the reality that Barack Obama is not who we thought he was. His words are responsible; his character is inspiring. But his actions betray a transformational liberalism that should put every centrist on notice."

Brooks's NYT column brings this retort from Time's Joe Klein:

"I disagree with him profoundly about the Obama budget -- and so, I would venture, do most moderate-liberals. The budget has to be seen in context. We are at the end of a 30-year period of radical conservatism, a period so right-wing that many of those now considered 'liberals' -- like, say, Barack Obama -- would be seen as moderate pantywaists in the great sweep of modern political history. The past 30 years have been such a violent departure from the norm, such a profound destruction of the basic functions of government, that a major rectification is called for now -- in rebalancing the system of taxation toward progressivity, in rebuilding the infrastructure of the country, not just physically, but also socially and intellectually.

"So it's not surprising that the president would feel the need to move on all fronts, rather than prioritizing, as Brooks would want. . . .

"In almost every case, Obama has chosen a moderate path of government activism -- or left the solutions deliberately vague. His ten-year, $150 billion green energy plan, for example, will mostly be accomplished through the private sector -- but it does tilt government away from the extreme benefits lavished upon oil companies in the past, policies that reeked of crony-capitalism rather than true conservatism, and toward alternative energy sources."

Can Obama make the sale? In the New Republic, Damon Linker is optimistic:

"Will the country really stick with Obama as he attempts to enact his stunningly ambitious agenda? They just might. But not because the 44th president has reawakened the liberalism that's been slumbering in their souls since the summer of 1968. As National Review's Rich Lowry noted in a brief post last week, Obama is defending his agenda not in ideological but in pragmatic terms -- saying, in effect, 'Hey, I'm not a big-government guy; it's just that the Republicans made such a wreck of the place that I have no choice but to do some big things to clean up the mess.' And as Lowry recognizes, that's an argument that just might persuade the American people to go along for the ride, shifting the political spectrum to the left for a generation, while also managing at long last to bury Reaganite conservatism."

The aforementioned Rich Lowry argues that it's all about the dollars -- many, many dollars:

"Obama exaggerated the downside of the economy two weeks ago so he could get more spending, and now he's exaggerating its upside so he can get more spending. The fixed goal is more spending. The means -- the rhetoric, the arguments, the assumptions -- are flexible so long as they serve that ultimate goal. The past few weeks should have cleared away the debate over Obama's intentions -- is he a pragmatist or an ideologue? Obama is a pragmatist in pursuit of an ideological prize, willing to zig and zag so long as his lodestar of expanded government is ahead of him. . . .

"By giving Pelosi running room and enduring a few embarrassments, he got what he wanted, which was as much new spending as quickly as the political system could bear. If barely any Republicans could support it, so what? Bipartisanship was a means, not an end. . . . Obama wants to give Congress a few principles and a $634 billion health-care slush fund, and let Congress go at it and write his health-care plan. How it works out exactly doesn't matter so much than it gets done -- and government grows."

Back to the market: The Dow was 9034 on Jan. 2, and closed yesterday at 6726. Guess whom the WSJ editorial page blames?

"Americans have welcomed the Obama era in the same spirit of hope the president campaigned on. But after five weeks in office, it's become clear that Mr. Obama's policies are slowing, if not stopping, what would otherwise be the normal process of economic recovery. From punishing business to squandering scarce national public resources, Team Obama is creating more uncertainty and less confidence -- and thus a longer period of recession or subpar growth.

"The Democrats who now run Washington don't want to hear this, because they benefit from blaming all bad economic news on President Bush."

Of course, the Dow dropped from over 14,000 to 9000 in the last year and a half of that other guy's term.

CNBC's Charlie Gasparino offers a similar analysis from the financial district:

"Barack Obama is losing the confidence of Wall Street. . . . They can't believe what they are witnessing: an economic agenda that is contradictory at best, and possibly reckless in its extreme. Policies that will certainly make a very bad situation even worse, and when things do get better, they will certainly not be better enough to compensate for the pain we are experiencing."

Hmm . . . Will anyone point out that these masters of the universe who now doubt Obama are some of the same people who plunged us into the crisis with their reckless peddling of worthless paper and toxic assets?

In light of the campaign, says Roger Simon, no one should be shocked:

"The Obama presidency has started off in a whirlwind. It has been a headlong rush. This is not small-bite politics. This is not school uniforms. With hardly a pause to take a deep breath, Barack Obama has presented an economic recovery plan, a bailout plan, a budget and a major foreign policy address. All have been bold. But people who were surprised by that boldness have not been paying attention . . .

"Nobody can say they were sold a pig in a poke. The differences between Obama and his agenda and John McCain and his agenda were very clear."

And then there are the differences between Obama and the Dems:

"President Obama's drive to change Washington's free-spending ways is running into a buzz saw of opposition from his party, as another top congressional Democrat on Tuesday bucked the president's plan to curb pork projects," the Washington Times reports.

"House Majority Leader Steny H. Hoyer became the second leading congressional Democrat in a week to push back against Mr. Obama's drive to curb member-directed earmarks on spending bills."

The Rahm/Rush/Michael Steele imbroglio is still high on the buzz meter. I asked Rahm Emanuel yesterday why he had elevated Rush to piƱata-in-chief. "I was complimenting him," he protested, for being up front about his desire for the president to fall on his face. He could not suppress a chuckle.

Yes, but a radio guy leading the GOP? "He is the leader of their party," Emanuel declared. Noting that Rep. Phil Gingery and Michael Steele quickly apologized for crossing Limbaugh, Rahm said: "I don't think they would have done that for me."

A handful of conservatives are challenging Rush, including former Bush speechwriter David Frum:

"It was a misstep for Steele to be drawn into a direct spat with Rush. But on the substance: Steele was right. Limbaugh is not the leader of the Republican Party, and this weekend he again demonstrated why not.

"Limbaugh mocked Steele for appearing on television and 'trying to be some talking head media star, which you're having a tough time pulling off.' Oh? As compared to whom? Nothing Steele said will be 1/1000 as harmful to Republicans and conservatives as Rush Limbaugh's now multiply repeated statement that he hopes President Obama fails.

"I cannot believe -- I mean I really cannot believe -- that a communicator as skilled as Limbaugh fails to comprehend the lethality of this remark. When Limbaugh says he hopes Obama fails, almost everybody listening will hear that as a wish for a longer and more severe recession. I appreciate that Limbaugh has a personal and ideological meaning behind his statement. He means that he wants the president's program to be rejected in favor of some other emergency package. But that's not what he said, and that's not what the big voting public will remember."

Rod Dreher, on his Crunchy Con site, is blunt:

"Anybody who challenges Limbavian orthodoxy is, ipso facto, the Enemy. If you suggest reform, even from the Right, you are a useful idiot for the Media, which are the Enemy, and can never be anything but the Enemy. Limbaughism sounds a lot like Leninism."

But liberals are mostly laughing. Take Josh Marshall:

"I'm loving Michael Steele. I mean, I'm not sure how else to put it. This guy has to be about the worst, most embarrassing party chair we've seen in recent memory. It's embarrassing enough that Steele is like, what? . . . the third Republican to criticize Rush and then make it less than 36 hours before being forced to undergo the 21st century Republican version of a Maoist self-criticism session. It's sad for the Republican party that no one can criticize Rush without having to be hauled out for this sort of humiliation a day or so later. But for Steele not to have realized that or not to have been sufficiently in control of his mouth to avoid saying this just shows once again that this dude is really, really not ready for prime time."

You may recall -- I do, because I reported it -- that TMZ once considered opening a branch in Washington. That plan fizzled, but not the political ambitions, as the San Francisco Chronicle reports:

"Harvey Levin, Hollywood's brash, unrivaled paparazzi king, has long set his youthful wrecking crew of reporters and photographers on Lindsay Lohan, Britney Spears and Brangelina.

"Now, the guru behind the gossip-rich TMZ cable and Internet franchise is expanding into a whole new universe.

"Call it paparazzi politics. 'We cover sports figures, chefs and people who are famous for all sorts of reasons . . . and some of them are in politics,' Levin told The Chronicle last week, a week in which TMZ.com named an Illinois representative the nation's 'hottest congressman' and broke a national story about bailed-out bank executives hiring singer Sheryl Crow for their lavish party in Los Angeles.

"TMZ's cell phone- and camera-wielding crews, which have caught Los Angeles Mayor Antonio Villaraigosa out on the town with fabulous women and dubbed him 'Mayor Suave,' aren't alone in stalking new quarry: Web sites like Hollywood.com are also getting political, posting regular red carpet photos of pols like San Francisco Mayor Gavin Newsom. Newsom was also nabbed on video last year in a hush-hush Malibu tete-a-tete with a political consultant. The report by L.A. paparazzi blogger Zuma Dogg (www. zumatimes.com) tipped off Newsom's run for governor.

"The trend underscores how elected officials might have to get used to a new media reality: Life could get a lot rougher as they have to deal with paparazzi-style tactics in addition to traditional reporting."

Hey, why should they be exempt?

Bonnie Fuller defends Michelle:

"Is Michelle Obama supposed to wear a burka? Since when are a woman's arms considered an erogenous zone here in America? Why would it be inappropriate for the First Lady to attend her husband's address to Congress in a beautiful, purple Narcisco Rodriguez SLEEVELESS dress?

"Whoever those twitterers -- or should I call them 'twits' -- are out there who have raised the question of propriety, they should not only get a life, but also a history book."

Now that Chris Matthews has spoiled our fun by not going after a Pennsylvania Senate seat, is CNBC's Larry Kudlow running for the Senate from Connecticut?

"I'm thinking about it, that's all I can say . . . it's the kind of thing where I'm talking to friends, talking to strategists, talking to my wife, and praying on it."

The moderator of "Meet the Press" makes "Doonesbury" with his tweets: 'OMG, David Gregory just had a ham sandwich!' "

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