This column is written in the aftermath of President Barack Obama’s inauguration and inaugural speech. Like every peaceful transition of power in the nation’s two hundred thirty plus years’ history, it was a stunning and emotional event. It was made even more so by the fact that Pres. Obama is the first African American to hold the office of President of the United States.

This transition comes during a difficult time. We remain under attack by a loose alliance of Muslim fanatics who believe that the transition to heaven comes through the random murder of innocents and can only be heighten by the depravity of their methods of torture and murder. And we are suffering what will shortly be one of our longest recessions amid an era of distrust of our financial institutions and the government and managers who have steered us into this economic calamity.
In large part, it is these two forces that have led to the election of Pres. Obama. He capitalized on a desire for change and an abandonment of the people and policies that have brought the nation to where it stands today. (It should be noted that while we have changed the “head” of the nation, we have left the “body” (the Congress) unchanged and as diseased as it has been for the past dozen years.

While I did not vote for Pres. Obama, he is my president and I hope for his ultimate success, particularly in dealing with these two problems. (Frankly, as a conservative I, like many others, could not bring myself to vote for John McCain either.) And as a conservative I was encouraged by Pres. Obama’s inaugural speech.

It is the first and foremost duty of the Commander in Chief to protect the nation and its people and to that end it appears that a very somber and purposeful Barack Obama leveled a steady gaze upon a watching world. The new president called out to the world that while we seek a new cooperation in international affairs, we will not surrender our independence or our liberty to those who measure success by that which they destroy rather than that which they build. The responsibilities of the office weigh heavily on every president.

And as to the economy, it appears that Pres. Obama recognizes that the prime driver to recovery is not the government but rather the health and growth of private industry. The President acknowledged that it is private business and not government that creates jobs, generates wealth and is the horse upon which economic growth rides. And it is upon that principle that I offer my advice.

Whenever I look for clear and clinical advice on the state of the economy and the markets, I look first to my friend Jim Stack, head of Investech Research and one of the nation’s leading “bear analysts.” Mr. Stack warned over a year early of the approaching housing market bubble, the resulting collapse of the credit markets, and the impact on the nation’s major financial institutions and the ancillary impact on main street businesses. It was because of Mr. Stack’s analysis and repeated warnings that I withdrew from the capital markets shortly before their collapse. And it is to him I owe a debt of gratitude that my retirement has been protected during these uncertain times.

And now Investech Research has weighed in on the irrationality prevalent in today’s markets. In his latest newsletter, Mr. Stack notes:

“In retrospect, we were one of the most bearish analysts going into last year, and remained skeptical when many were saying the storm clouds had passed. Yet just as former Federal Reserve Chairman Alan Greenspan questioned the “irrational exuberance” of the late 1990s (but failed to act responsibly to stop it), we now find ourselves questioning whether investor sentiment has reached the opposite end of the spectrum. In other words, has the level of gloom and pessimism reached irrational extremes?”

We have been gaining and losing the same 1,000 points in the Dow as it swings between irrational exuberance and irrational pessimism. In the past, a gain or loss of 100 points in a week was considered a strong tend. We now see that on any given day the market may gain and lose over 200 points. It responds more to rumors, to hope, and to crystal balls than it does to fundamentals of business (profit, loss, growth, job creation and loss, etc.). And the nation’s newspapers and broadcast media, having failed to warn of the coming collapse, are insistent on predicting the continuation of calamity.

One of the most interesting aspects of our past economic downturns, as chronicled by Mr. Stack, is that the media reached its peak of hysteria just as the economy began its recovery. It happened in 1974, 1982 and 1987. In all probability it is happening again today. It is difficult to know whether it is out of an abundance of ignorance or a desire to lower expectations on behalf of a new president in whom the mainstream media is so heavily invested but they have engaged in a constant “Ohmygawd” parade of horribles since the beginning of the year predicting that the recession may last for decades.

They are wrong as are those who believe that government is the solution to every problem including the current economic problems.

The primary enemy of the economy today, this day, is the drumbeat of pessimism about the future. Second only to the duty to protect our citizens, I believe that it is Pres. Obama’s duty to quiet the anxieties and reassure the citizens that the nation’s economy can begin the long climb out sooner rather than later. As President Reagan used his “bully pulpit” to inspire optimism in the aftermath of Jimmy Carter’s malaise, Pres. Obama should use his “bully pulpit” to give courage to America’s small and large businesses to recapture their zeal for growth and innovation. At this point in time, the nations needs less stimulation packages and more confidence that we can regain our footings and again lead the world’s economy.

There is a sense that Pres. Obama has, as other presidents, been engulfed in the enormity of the presidency and where soaring rhetoric may have been good for the campaign trail, sober reality is the measure of his new leadership. In his inaugural address, Pres. Obama noted:

“In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of short-cuts or settling for less. It has not been the path for the faint-hearted – for those who prefer leisure over work, or seek only the pleasures of riches and fame. Rather, it has been the risk-takers, the doers, the makers of things – some celebrated but more often men and women obscure in their labour, who have carried us up the long, rugged path towards prosperity and freedom.

“For us, they packed up their few worldly possessions and travelled across oceans in search of a new life.

“For us, they toiled in sweatshops and settled the West; endured the lash of the whip and plowed the hard earth.

“For us, they fought and died, in places like Concord and Gettysburg; Normandy and Khe Sahn.

“Time and again these men and women struggled and sacrificed and worked till their hands were raw so that we might live a better life. They saw America as bigger than the sum of our individual ambitions; greater than all the differences of birth or wealth or faction.”

It is individual courage, effort and initiative that brought America to where it is today. It was an encouragement that we again rely on those attributes, rather than government, to build for the future. It is, in fact, the standard by which future government actions should be measured.

  • Jerry

    Well, the market sure loved this guy on his first day.

  • Vernon

    I sincerely doubt that the media is driving the down economy or keeping it down. Must we always blame the media for eveything? If they were so powerful, why can’t they lift themselves up?

  • Mary

    Don’t you wish Mr. Stack was the editor of the Oregonian or the Wall Street Journal?

  • Reper

    Mr. Stack should definitly replace that Mad Money guy on TV.

    As for Obama, I did wish for at least one specific detail of soemthing he would do.

  • Rupert in Springfield

    At this stage of the game is at what point the economy will come back.

    Obama has appointed a largely center right economic team. He has swung quite a bit from his campaign positions and seems less enamored of tax increases and a little leery of canceling the Bush tax cuts. The man is not an idiot and his actions in this regard indicate he knows what ends recessions, even if the more leftist members of his constituency refuse to face it.

    What would be disastrous is to open the flood gates of spending even more. The WPA reminiscent public works programs we hear tell about can be expected to have the same effect as always, recession prolongation.

    My hope is that the optimism a lot seem to have right now lasts long enough for the former to take hold and does not dissipate so early as to allow the possibility of the latter.

  • sybella

    My hope is that President Obama will use the intelligence he has shown and mix it with some common sense. I too am concerned about the team he has picked.

    We need to pray for and support him and mostly encourage him to do the right thing. I know the right thing for one is not the right thing for the other, but I believe there are enough right things out there for all of us.

    I too wish the media would encourage, rather than discourage us. Nobody said life was easy and nobody said it was fair but with hope for the future it can be much easier and more fair.

  • John in Oregon

    My earlier comments are also appropriate here.

    With the inauguration yesterday I noticed two points. The first was not a surprise, the second however was, as it came from left field. That I will mention in a separate posting.

    As I listened to Obamas address I looked for that central kernel upon which Obamas ideas were built. That fulcrum for the lever, the pivot for the teeter-totter, the foundation from which Obama strives. The image upon which assumptions and world views are built

    I found that kernel though I doubt few noticed and none in the legacy media will remark. I found it here when Obama said;

    “And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to suffering outside our borders; *nor can we consume the world’s resources without regard to effect.* For the world has changed, and we must change with it.”

    Ignoring that we, the people of the United States, have responded more than any to the tsunami, earthquakes, and pestilence than any other. Consider the source of the worlds resources, the worlds wealth.

    One view. wealth is taken from the earth. Wealth is limited, exploited, consumed.

    The other view is wealth is created by the endeavor of free people.

    The United States is 6 percent of the world population, uses about 25 percent of the world commodities, and controls some 40 percent of the worlds wealth.

    For many those facts mean the United States has an unjust share of the world wealth. That we are rich at the expense of others being poor. That is what Rajendra Pachauri, chairman of the Intergovernmental Panel on Climate Change believes. As does John Holdren appointed by Obama as science advisor. That is what Paul Ehrlich said in the Population Bomb.

    The USA cast as Prince Edward, its demands enforced by the Sheriff of Nottingham.

    BUT, what if? What if the Malthusian theory championed by Ehrlich, Pachauri, and Holdren is wrong. What if wealth is created by the endeavor of free people liberated from the leash of Government control?

    Then that would mean that the United States with less than 6 % of the worlds population and using less than one quarter of the commodities is producing something less than half the worlds wealth.

    One of these two world views, exploitation of limited wealth versus wealth creation by free people, one of these will be the foundation that will color the policies of Obama built upon that foundation.

  • John in Oregon

    My second observation from the inauguration requires some history.

    Marian Anderson was born in 1897 in South Philadelphia. At the age of six she sang in the Church Choir where her clear voice was praised. Marian’s mother’s religious faith and strength were lasting influences throughout Marian’s life.

    With the financial help of her church Marian began taking private lessons ultimately studying under Giuseppe Boghetti. In 1925 she entered a contest and won first prize, an opportunity to perform with the New York Philharmonic Orchestra.

    From there Marian toured post war Europe performing to rave reviews and acclaim for a voice that was one in a million.

    Then in 1939, she was scheduled to give an Easter Sunday concert at the Constitution Hall in Washington DC. And the Daughters of the American Federation (DAR) refused to let her perform because she was black.

    The Washington elates were incensed. Eleanor Roosevelt, was outraged at the prejudice. Eleanor publicly resigned her membership in the DAR. Splashed across the headlines of every newspaper the controversy raged.

    The press asked Marian to speak, she said no. The elates asked Marian to speak out, she said you don’t fight hate with hate. Speak out they said, the first lady is with you. No she said, you don’t defeat hate with more hate.

    Then on Easter Sunday, 1939 Marian was invited to perform a free concert on the steps of the Lincoln Memorial. All the radio networks were there, the concert broadcast across the country from shore to shore.

    Marian stepped up to the microphones. What would she say. The crowd was silent as Marian looked out from the steps. In anticipation the crowd waited to hear what Marian would say. Marian began;

    …My country,’ tis of thee,
    …sweet land of liberty,
    …of thee I sing;

    …land where my fathers died,
    …land of the pilgrims’ pride,
    …from every mountainside
    …let freedom ring!

    Yesterday full circle.
    Aretha Franklin stepped up to the microphone.