There’s no rest for the weary, journalists or the president. Now that we’ve got a clear winner, let’s take a look at some of the biggest business stories that President Barack Obama will have to focus on in the coming months and years.
First, there’s the so-called fiscal cliff and overhaul to the tax code looming. U.S. stock market investors quickly shifted to thinking about this the day after the election, sending the Standard & Poor’s Index down 2.4 percent on Nov. 7. Here’s what the New York Times said about the situation:
After his speech, Mr. Obama tried to call both Mr. Boehner and the Senate Republican leader, Mitch McConnell, but was told they were asleep. The efforts from both sides, after a long and exhausting campaign, suggested the urgency of acting in the few weeks before roughly $700 billion in automatic tax increases and across-the-board spending cuts take effect at year’s end — the “fiscal cliff.” A failure to reach agreement could arrest the economic recovery.
Corporate America and financial markets for months have been dreading the prospect of a partisan impasse. Stocks fell on Wednesday, with the Standard & Poor’s 500 Index closing down 2.4 percent. The reasons for the drop were unclear, given that stock futures did not drop significantly on Tuesday night as the election results became clear. Analysts cited fears about the economic impact of such big federal spending cuts and tax increases, but also about new economic troubles in Europe.
Here’s the Wall Street Journal’s take on the fiscal cliff:
In carefully worded comments Wednesday, major actors in the fiscal drama were both conciliatory to their adversaries and resolute in sticking to their principles. Whether this represents a temporary truce, or a step toward a pact to trim the deficit, won’t be known for weeks.
But the pressure is on. Deep, automatic federal-spending cuts and tax increases—a combination widely known as the “fiscal cliff”—will hit in January unless Mr. Obama and Congress agree to some other way to reduce the budget deficit.
Going over the cliff, economists say, would not only risk another recession, but would intensify anxiety about the dysfunction of the U.S. political system. Uncertainty over political turmoil could lead to more turbulence like Wednesday, when the Dow Jones Industrial Average fell 312.95 points, or 2.4%, to 12932.73. That was this year’s largest decline in both points and percentage terms. Asian markets also fell in early trading Thursday, with Tokyo down 1.2% and South Korea down 1.4%.
And the fiscal cliff is just the beginning for the president. Business journalists will have their hands full covering many topics that touch the president’s next four years. Here’s my unscientific list:
Domestic stories will include:
- Fiscal cliff (see above);
- Changes to the tax code;
- Jobs, the unemployment rate (especially in swing states like North Carolina and Nevada);
- Inflation and monetary policy – what will happen with low interest rates through 2014;
- Home prices;
- Bank regulation, especially rule making for derivatives and other structured products. We’ll have to watch the CFTC particularly closely;
- Who will be the next Treasury Secretary as well as fill the other senior administration posts being vacated;
- Student loans and the rising cost of education;
- Small business and if we’re actually creating jobs;
- The role of government in rebuilding after natural disasters;
International:
- Europe, particularly Greece, Italy and Spanish debt;
- China and the rise of its economic prowess;
- Foreign ownership of U.S. debt;
- Import and export tariffs;
- All the economies in the BRIC countries;
- Transparency of global markets;
- The state of the European Union and its currency;
I’m sure I’ve forgotten some important ones, so leave a comment with your ideas of what’s going to be important over the next four years. Business journalists are going to be busy and so will our government leaders.
