John P. Avlon is the author of Independent Nation: How Centrists Can Change American Politics and he writes a weekly column for The Daily Beast. Previously, he served as Chief Speechwriter for New York City Mayor Rudy Giuliani and was a columnist and associate editor for The New York Sun.
By John Avlon
Special to CNN
Despite all the recent screaming about socialism, Barack Obama’s past month and a half has quietly been pretty good for capitalists.
Yesterday, the stock market picked up more than 200 points, capping weeks of rallies that have erased almost all of 2009’s losses to date. The market hit its low on Obama’s 50th day in office – March 9th – but since that early crisis of confidence, the Obama administration’s economic plans have started to solidify and begun to take hold. Perhaps the most important measure is polls that show the American people feel our country is moving in the right direction again.
The acid test of yesterday’s rally was the fact that it continued after President Obama announced plans to close corporate tax loopholes and offshore tax-havens. If the market was feeling myopic there might been an immediate negative impact – some Wall Street commentators still reflexively tried to paint it as anti-big business class warfare. But it was accompanied by a plan to make the research and development tax credit a permanent tax cut, incentivizing long-term economic competitiveness. And the plan was carefully framed with Main Street common sense (despite the odd intro of Treasury Secretary Geithner, castigating individuals who don’t pay all their taxes): “I want to see our companies remain the most competitive in the world,” said the president. “But the way to make sure that happens is not to reward our companies for moving jobs off our shores.”
A bit of springtime optimism may be influencing this market rally. The absence of deepening crisis may be mistaken for good news. There will likely be additional bumps on the road to recovery – this week’s bank stress test might be one such bump. Some economists will argue that these closed loopholes should be accompanied by a reduction in the U.S. corporate tax rate, which is the second highest in the world. The long-term economic impact of the unprecedented stimulus spending still remains to be seen. Our deficit and debt have ballooned and, if unaddressed, represent a new degree of generational irresponsibility. Remember, reckless spending got us into this mess in the first place.
But if President Obama was blamed by some partisans for the market’s decline in his first 50 days, then its only fair that he receive some credit for the rebound now. We’re not out of the woods – there’s plenty of anger left for both big government and big business – but at least compared to Bushonomics, Obamanomics is starting to look pretty good these days. And that’s good news for everyone who’s invested in America’s success.