After months of sounding the alarm bell, President Obama is finally talking up the economy.
President Obama told Americans to take a look at investing in the stock market this afternoon, a remarkable utterance for an American president, especially as the Dow Jones Industrial Average proceeds on its course Southward.
“What you’re now seeing is … profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long-term perspective on it,” the president said on a day that trading continued to hover under 7,000.
The president predicted that Americans’ consumer confidence would improve as they see the stimulus bill “taking root.” “Businesses are starting to see opportunities for investment and potential hiring,” he said. “We are going to start creating jobs again.”
The macroeconomy is incredibly complex, obviously, and thus hard to unravel. Megan McArdle, for example, argues that we may yet be a long way from bottom.
But to the extent that what’s happening with the stock market is a crisis of confidence and sheer panic selling — and I do think these are major factors beyond the underlying real systemic problems — then having a popular president jawbone can help.
Whether he can cheer Donald Sensing up about his retirement portfolio, I don’t know. It would be more likely to work, though, if Obama would use something more akin to his campaign rhetoric than wonky talk about price-to-earning ratios.
