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As Oreo reported, this morning the Transition Team will roll out the Economic Team. Welcome to the business of governing. It’s a lot like making sausage, except you also need a marketing plan.
We are all pretty sure that the names Tim Geithner and Larry Summers will be mentioned. The address, scheduled for noon Eastern Time, will be on TV, and probably simulcast on the net. The likelihood is that the package will be a $700 billion stimulus injection.
You can watch/read President-elect Obama’s Saturday address here, where he cites that his economic program will include the saving and/or creation of 2.5 million jobs.
Those are the facts as known. The question is: what does it all mean?
First, realize that a lot of what happens in the economic markets is perception-driven. “The markets” respond to what people think WILL happen, or what DID happen based on what people thought WOULD happen. Examples include futures markets (e.g. what will coffee/oil/soybeans be worth in 3/6/12 months?), and the expectations game (e.g. a stock might rise because third quarter earnings were higher than what markets expected the company would earn.) You personally know “the perceptions game” in your own life. Even if you are making the same amount of money now that you were six months ago, you are likely spending less discretionary income, or at least thinking about it more before you write that check.
Second, there are institutional concerns that are NOT perceptual. The potential failure of Citigroup heads that list today. The loss of the American auto industry. You know the list if you read the headlines, watch the news, or read the internet. Face it, even the world’s oldest profession is hitting harder times than usual.
Third, remember that this is not only a war-time transition (first in the U.S. since 1968-69), but also the first transition during an economic catastrophe since 1932/33.
If everything goes according to plan, what today’s Economic Team roll-out will mean is that the adults have arrived. The smart adults. The ones who will say that times are tough, and results will not be immediate, but we WILL get through this, and we will emerge as a stronger, better world.
On Friday afternoon the whispered name of Tim Geithner raised the markets by 500 points. That’s perception. When President-elect Obama announces today that his program is working its way through Congress and should be ready for signing on 20 January 2009, that is a big sigh of relief and hope. There will be a plan for those concerns which are reality. Finally, this speech will bridge the two months between now and the new administration.
We’ll have the video up as soon as it’s available.