The confetti is done dropping. The administration has a matter of days to figure out what they are going to do about the 2 largest banks in the country. 20% of the nation's deposit base and bank lending capacity are tied up in those banks. Short of buying the troubled assets in the next few days or another injection of capital, I don't know what they can do. I have no idea how the hell Citi and BAC are gonna convince their auditors what their assets are worth between now and March 1, the date that the annual reports have to be filed with the SEC. Of course, the old "that paper's worth 100" answer that they rubber stamped the past few years ain't gonna fly, so the government better get a plan in place real quick.
With respect to how The President will do, his legacy is far beyond his control. If we're staring down a Japanese type of funk and the economy doesn't recover fairly quickly, he'll be deemed an abject failure just like every Japanese Prime Minister has been bince the early 1990's. If we're looking at just a normal credit cycle bottom/recession that is a little deeper than usual, the business cycle will recover fairly quickly once the banks stabilize and he'll be re-elected easily.
Our country had about a 16 year period of unfettered prosperity and we'll do anything to get it back. Sure, we had a slowdown in 2001-2002 with the implosion of the net bubble and 9/11, but that recession wasn't really that bad. I think one big change that happened over the past 2 decades or so was that the American worker has been opened to an amount of competition they had never seen due to improvements in logistics and high speed communications and computing. Customer service, engineering, programming, accounting and a slew of other back office jobs that used to provide a steady flow of middle class jobs have been moved to India. Additionally, the technology boom/globalization has eroded the manufacturing base in many parts of America. I am of the opinion that regaining the cost adjusted competitive advantage is outside the purview of the Executive, as the underlying causes are well outside of his control.
The Fed has soaked the market with cheap dollars bince the early 90's. This cheap dollar policy masked the erosion of the base of manufacturing and back office jobs. The cheap dollar steered capital into the stock market, leading to a tremendous run up in stocks. It also helped shift those who had been displaced from manufacturing or back office jobs into other growth industries that sprung up around the two big bubbles we've seen in the past few decades.
Though I am long term bullish for America, I think that if you scratch the surface of the sources of economic growth the past 2 decades, there really isn't a whole lot of substance. And this is deeper than a union or non-union issue, or a capital versus labor issue, it's an issue of our nation's wealth only expanding on paper through investments based on the number of "eyeballs" that hit a webpage or the installation of a granite countertop and Sub Zero appliances, spurious measures of wealth at best.
Call me crazy, but I don't think the really, really big ticket issues in this country were created by one man or one political party. Nor do I think one man or one political party has the ability to bail the country out from the really, really big ticket issues that the country faces.
I do note, however, that when the President makes statements like this in his speech:
"The question we ask today is not whether our government is too big or too small, but whether it works - whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified"
I really fear that we have shifted from a country of self-reliant hard working people with strong backs, to a bunch of whiny bitches who think that every single fucking thing they do requires the government to back them up and every single thing that goes wrong is the government's fault. If government "works" to provide high wages, health care and a "dignified" retirement, but it requires the reallocation of 80% of the GDP to do so, there is something seriously wrong.