Jan. 21 (Bloomberg) -- President Barack Obama begins his “new era of responsibility” today by gathering economic advisers to tackle the banking crisis after an inaugural address in which he outlined an agenda aimed at nothing short of “remaking America.”
Obama’s speech yesterday was dominated by twin themes of optimism about the future of the U.S. and a sober warning on the difficulties of managing two wars and the worst economic climate in generations. “Starting today we must pick ourselves up, dust ourselves off and begin again the work of remaking America,” he said.
As if to reinforce his message about the hard tasks ahead, the Dow Jones Industrial Average fell 4 percent, the most on any Inauguration Day in the history of the index. Investor concern that banks must raise more capital sent financial shares to an almost 14-year low. State Street Corp. fell 59 percent, while Wells Fargo & Co. and Bank of America Corp. dropped more than 23 percent.
“What is required of us now is a new era of responsibility, a recognition on the part of every American that we have duties to ourselves, our nation and the world,” said Obama, 47. “This is the price and the promise of citizenship.”
Managing Expectations
In his choice of words yesterday, Obama sought to harness the powerful expectations his election unleashed to marshal support for his programs. At the same time, he needs to manage those emotions to avoid disappointment in the face of the steep challenges ahead.
“He didn’t strive for eloquence or uplift to the degree that he has in the past, precisely because he didn’t want to exacerbate those overheated expectations,” said presidential historian Bruce Buchanan of the University of Texas at Austin.
The president’s words were “very carefully chosen,” Buchanan said. “He was trying to signal that we’re going to have a party today, but that we’re going right to work, and this is not going to be over in a day, a week, a month or a year.”
The plunge in bank stocks yesterday added pressure on Obama to take quick action as he meets with his economic advisers today. While full details of a bank rescue haven’t been settled yet, people familiar with the deliberations said the package is likely to include a $50 billion-plus program to forestall foreclosures, fresh injections of capital into the banks and steps to deal with toxic assets clogging lenders’ balance sheets.
Stimulus Package
The plan for the banks may be twinned with an $825 billion economic-stimulus bill being negotiated with Congress.
Obama said yesterday the moment “calls for action, bold and swift” to resolve the crisis, which cost the economy 2.6 million jobs last year, the most since 1945.
Obama also plans a separate meeting today with his national-security team to discuss his goal of drawing down troops in Iraq while bulking up forces in Afghanistan. The meeting will include Army General David Petraeus, who commands U.S. forces in the Middle East, Defense Secretary Robert Gates and Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, according to a White House aide.
He also has signaled that one of his early steps may be to issue executive orders on ethics in government and closing the Guantanamo Bay detention center. Yesterday, White House Chief of Staff Rahm Emanuel ordered all federal agencies and departments to stop all pending regulations until they can be reviewed.
In his speech, Obama reaffirmed in broad strokes the agenda that he campaigned on. He spoke of building roads, bridges, electrical grids and digital lines; restoring “science to its rightful place” and using technology “to raise health care’s quality and lower its cost.”
Harnessing the Sun
In addition, he said, “we will harness the sun and the winds and the soil” to fill the nation’s energy needs and “transform our schools and colleges and universities to meet the demands of a new age.”
“All this we can do,” he said. “And all this we will do.”
Obama also made clear he intends to change his country’s relationship with other nations. Addressing the Muslim world, he offered “a new way forward based on mutual interest and mutual respect.” He also reaffirmed his willingness to do business with unfriendly dictatorships if they are interested.
“We will extend a hand if you are willing to unclench your fist,” he said.
At the same time, Obama tempered his message of change with reminders of the problems he inherits: a faltering economy, a soaring federal budget deficit and two wars. In his speech, he warned of “gathering clouds and raging storms” and the “rugged path toward prosperity and freedom.”
Lack of Lyricism
Joel K. Goldstein, a presidential historian from St. Louis University, said unlike famous inaugural addresses by Abraham Lincoln, Franklin Roosevelt and John Kennedy, Obama’s speech lacked “a single poetic or lyrical sentence.” That was probably by design, Goldstein said.
“Soaring rhetoric can be dangerous, particularly in times like these when problems are so severe,” Goldstein said. “He may not have wanted to create false expectations.”
Former New York Governor Mario Cuomo said the tenor of the speech showed Obama “understands the challenge and is willing to accept” its burdens. “He didn’t fudge,” Cuomo said. “He wasn’t building any shelters for himself.”
In the end, several presidential scholars said, the lone fact of an African-American ascending to the presidency may be more memorable than anything Obama said on Inauguration Day.
“Obama could have read the telephone directory and millions would have cheered,” said Larry Sabato, a political scientist at the University of Virginia in Charlottesville.
Obama’s speech yesterday was dominated by twin themes of optimism about the future of the U.S. and a sober warning on the difficulties of managing two wars and the worst economic climate in generations. “Starting today we must pick ourselves up, dust ourselves off and begin again the work of remaking America,” he said.
As if to reinforce his message about the hard tasks ahead, the Dow Jones Industrial Average fell 4 percent, the most on any Inauguration Day in the history of the index. Investor concern that banks must raise more capital sent financial shares to an almost 14-year low. State Street Corp. fell 59 percent, while Wells Fargo & Co. and Bank of America Corp. dropped more than 23 percent.
“What is required of us now is a new era of responsibility, a recognition on the part of every American that we have duties to ourselves, our nation and the world,” said Obama, 47. “This is the price and the promise of citizenship.”
Managing Expectations
In his choice of words yesterday, Obama sought to harness the powerful expectations his election unleashed to marshal support for his programs. At the same time, he needs to manage those emotions to avoid disappointment in the face of the steep challenges ahead.
“He didn’t strive for eloquence or uplift to the degree that he has in the past, precisely because he didn’t want to exacerbate those overheated expectations,” said presidential historian Bruce Buchanan of the University of Texas at Austin.
The president’s words were “very carefully chosen,” Buchanan said. “He was trying to signal that we’re going to have a party today, but that we’re going right to work, and this is not going to be over in a day, a week, a month or a year.”
The plunge in bank stocks yesterday added pressure on Obama to take quick action as he meets with his economic advisers today. While full details of a bank rescue haven’t been settled yet, people familiar with the deliberations said the package is likely to include a $50 billion-plus program to forestall foreclosures, fresh injections of capital into the banks and steps to deal with toxic assets clogging lenders’ balance sheets.
Stimulus Package
The plan for the banks may be twinned with an $825 billion economic-stimulus bill being negotiated with Congress.
Obama said yesterday the moment “calls for action, bold and swift” to resolve the crisis, which cost the economy 2.6 million jobs last year, the most since 1945.
Obama also plans a separate meeting today with his national-security team to discuss his goal of drawing down troops in Iraq while bulking up forces in Afghanistan. The meeting will include Army General David Petraeus, who commands U.S. forces in the Middle East, Defense Secretary Robert Gates and Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, according to a White House aide.
He also has signaled that one of his early steps may be to issue executive orders on ethics in government and closing the Guantanamo Bay detention center. Yesterday, White House Chief of Staff Rahm Emanuel ordered all federal agencies and departments to stop all pending regulations until they can be reviewed.
In his speech, Obama reaffirmed in broad strokes the agenda that he campaigned on. He spoke of building roads, bridges, electrical grids and digital lines; restoring “science to its rightful place” and using technology “to raise health care’s quality and lower its cost.”
Harnessing the Sun
In addition, he said, “we will harness the sun and the winds and the soil” to fill the nation’s energy needs and “transform our schools and colleges and universities to meet the demands of a new age.”
“All this we can do,” he said. “And all this we will do.”
Obama also made clear he intends to change his country’s relationship with other nations. Addressing the Muslim world, he offered “a new way forward based on mutual interest and mutual respect.” He also reaffirmed his willingness to do business with unfriendly dictatorships if they are interested.
“We will extend a hand if you are willing to unclench your fist,” he said.
At the same time, Obama tempered his message of change with reminders of the problems he inherits: a faltering economy, a soaring federal budget deficit and two wars. In his speech, he warned of “gathering clouds and raging storms” and the “rugged path toward prosperity and freedom.”
Lack of Lyricism
Joel K. Goldstein, a presidential historian from St. Louis University, said unlike famous inaugural addresses by Abraham Lincoln, Franklin Roosevelt and John Kennedy, Obama’s speech lacked “a single poetic or lyrical sentence.” That was probably by design, Goldstein said.
“Soaring rhetoric can be dangerous, particularly in times like these when problems are so severe,” Goldstein said. “He may not have wanted to create false expectations.”
Former New York Governor Mario Cuomo said the tenor of the speech showed Obama “understands the challenge and is willing to accept” its burdens. “He didn’t fudge,” Cuomo said. “He wasn’t building any shelters for himself.”
In the end, several presidential scholars said, the lone fact of an African-American ascending to the presidency may be more memorable than anything Obama said on Inauguration Day.
“Obama could have read the telephone directory and millions would have cheered,” said Larry Sabato, a political scientist at the University of Virginia in Charlottesville.
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