"After President Obama’s re-election, fears are growing that more of the same gridlock in Washington over fiscal policy will slow the economy to a stall in the next few quarters, perhaps even tipping it into recession." NY Times article states, saying these fears sent stocks much lower yesterday, roughly 2%. In the article, as like a previous blog I posted, “We still have a divided government, and they haven’t been able to agree on what to do.” (Dean Maki)
“The U.S. isn’t being pressured by markets to do a deal,” he said. “That gives Washington the incentive to push it off.” (Dean Maki)
This article talks about the European Unions slow recovery in 2013, but unemployment will still remain high, and GDP will shrink.
What do you think about this article in discussing the future of Obama's presidency and what will happen with major industries in American for the next year?
It seems that the fiscal cliff is on everybody's mind now that we know that Obama has been reelected. However, the question still stands about exactly what will be done to fix or control this issue. Although Obama seems to be leaving people in the dark about the situation, I feel that there will be some sort of compromise such as Maki suggests in this article. Instead of totally hitting this fiscal cliff, hopefully policies can be implemented that limit the tax increases that are being planned for. Regardless, something needs to be done about this situation.
ReplyDeleteI'm hoping like hell with my fingers crossed that Washington can put their differences aside for a while and at the very least create some sort of compromise. It's getting so tiring to hear about congress and how they are too polarized to make anything happen. I understand that it is difficult, especially after doing that budget deficit activity in class, but the fiscal cliff is nearing fast and something needs to be done. Not to mention, it would be horrible for us and other college seniors if we hit the cliff in full force. The last thing I want is to come out of college with my degree, ready to work, and our country is possibly going into recession.
ReplyDeleteFirst of all, lets analyze the real reasons stock markets plunged 2% yesterday. Fear of the 'fiscal cliff' certainly played a part into it, but overall-- It was because a lot of financial firms were behind Romney's campaign. The top contributors to the Romney campaign this election were: Goldman Sacs, Bank of America, Morgan Stanley, JP Morgan Chase, and Credit Suisse. All of these are financial firms heavily rooted in the stock markets.
ReplyDeleteAlongside this, Obama has vowed to place heavier regulation on profits for our oil industry. These are also integral parts of the stock market, as this industry is crucial to our economy in general. Obama has also vowed to wrangle in spending in healthcare and coal industries. These are industries equally tied into the markets.
Food for thought? Look at the top contributors to the Obama campaign: University of California, Microsoft, Google inc, and Harvard University.
The fact of the matter is, affluent countries heavily interwoven into the stock markets bet on Romney for election day. His contributors live and thrive on profits in the stock market. The drop in overall stock market numbers is heavily due to this loss in investor confidence. While Romney advocated de-regulation and a wild west Wall St.--Obama aims to corral excesses in spending throughout through our financial system. Yesterday was a big, "ohh shit.." moment for a lot of these investors.
Congress definitely has to get their act together. There is nothing more important than dealing with the financial crisis; it affects everyone and something has to be done. Congress should know what it has to do at this point being so near to the fiscal cliff. It's not ok to be idle just because there is no pressure from the markets to make a deal. Like Alex mentioned, graduating in time for the cliff will be horrible!
ReplyDeleteAs has already been stated, the most important factor in solving our financial problems is the ability of congress to work together. I personally am getting to the point where I feel like certain members who are just plain unreasonable and unwilling to compromise should be punished in some form or another. Nothing is getting done, the economy is barely growing and we might end up going in reverse if congress members dont stop being so stubborn. Andrew's point about most of the big banks backing Romney in the presidential election definitely had something to do with the stock market decrease that occurred yesterday. People are losing faith in markets overall because everyone knows that the U.S. is so divided, and might not change much in the next few years if this opposition continues.
ReplyDeleteI think it would have been the same story, different player if Romney would have won. If the financial market is anything like the nation itself, people are split 50-50 either way for the most part. Somebody was going to lose, and that somebody's allies were going to be upset. At some point this whole mess has to be resolved and one side or the other is going to have to make concessions.
ReplyDeleteYikes! This article has a pretty pessimistic view of the economy’s reaction to the election. Basically as many of you have said it, Washington needs to works together and get things done. Politics is not simple by any means, trying to get something passed can lead to endless debates. If Washington is more split then even, Congress will be wasting their time arguing with each other. Congress and politicians in Washington need to remember that they are working for millions of people. Collaboration is what we need to get things done!
ReplyDeleteIn regards to economic slow down, I think the government should be putting a higher priority to support business growth. With all the focus on the healthcare movement, I am a little nervous to see what will happen to job growth in the next year.
Regarding Obama's presidency, in his last 4 years in the office he could not meet the expectation of all the people. Perhaps the expectation were too high and unrealistic. He has made mistakes in last four years. He needs to rethink on some of his policy. If he is not repeating his mistakes and is able to work with the Congress better then his presidency in the next four years will bee a lot better than the last four years.
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