By JOSH BOAK

Deep skepticism about Congress passing President Barack Obama’s $447 billion jobs package and fears that Greece could slip into default sparked a severe stock market selloff on Friday.

The Dow Jones Industrial Average closed down 304 points, or 2.69 percent, a reminder of how dangerously fragile the situation is despite government initiatives worldwide to stabilize the economy and fuel growth.

“There is only so much we can withstand before we move into a recession,” said Mesirow Financial chief economist Diane Swonk.
Europe had primarily caused the downturn, Swonk said, although political gridlock and reports of a possible terror attack on the 10th anniversary of Sept. 11 on Sunday also weighed heavily on traders Friday.

German officials said Chancellor Angela Merkel’s government is putting together a strategy for supporting banks in the event Greece defaults, according to Bloomberg News. A default could ignite a further selloff that would bite into the revenues and profits of American companies with European operations, a shock that could possibly pull the stalled U.S. economy into a full-blown recession.

Tangent Capital’s James Rickards said Wall Street has already priced Washington dysfunction into the market. Still, traders found little reason for optimism in the president’s address to Congress Thursday night.

With Republicans controlling the House of Representatives, the jobs package—which may be the last chance at a fiscal stimulus for next year—will undoubtedly struggle to survive the legislative process intact.

“Why is this plan unlikely to pass?” wrote Bank of America Merrill Lynch economists Neil Dutta, Michael Hanson, Ethan Harris. “Primarily because the broad contours of the plan are similar to the 2009 stimulus plan, with more than half of the stimulus coming from spending increases. That plan passed in the context of a deep recession and with a Democratic majority in both houses of Congress – no House Republicans voted for the plan.”

The jobs package is roughly half the size of the 2009 stimulus. Analysts estimate the Obama plan, if fully enacted, could increase GDP next year by as much as 2 percent, with its combination of reduced payroll taxes, extended unemployment benefits, aid for state and local governments, and a steep ramp up in construction spending.

Obama said in his address to Congress that his plan is paid for, but he didn’t detail the specific ways he intends to meet the cost.

Those specifics will come in the weeks ahead, according to the White House.

Despite the plan’s possible economic benefits, the charged political climate has turned against the prospect of additional short-term deficit spending to pay for the jobs package.

UBS analyst Drew Matus noted that the public is wary of piling on any debt, citing a recent poll by NBC and The Wall Street Journal.
“The president’s plan faces a key challenge from the public’s continued concern over the budget deficit,” he said. “As of the end of August, 56 percent of Americans want the president and Congress to focus on the deficit while only 38 percent want them to focus on boosting the economy.”

Read more: http://www.politico.com/news/stories/0911/63110.html#ixzz1Xa4CE95k

By Peter Heck

EXTRACT ONLY:  It’s a well-known political axiom that presidents will often be credited with accomplishments they did not earn and be criticized for failures that were out of their control. But just as often, particularly in our modern era where we have — against the wise counsel of our Founders — consolidated more and more power in the hands of our federal executive, presidents own the failures that happen on their watch. The disastrous and nationally humiliating downgrade of our country’s credit rating was not an inevitable consequence of uncontrollable misfortune. It wasn’t the result of gridlock or political wrangling between two parties that have bickered over our national debt and credit since the days of Thomas Jefferson and Alexander Hamilton. It was a remarkable failure of leadership by the man chosen to be the country’s economic caretaker.

For a full three days following the unprecedented embarrassment, the leader of the free world remained silent. Perhaps he was recovering from an exhausting, multi-day birthday bash and political fundraiser that he threw for himself in two separate cities. Or maybe his delay was to give his senior staff time to come up with more meaningless platitudes that he could dispassionately read from the TelePrompter, ostensibly to reassure a panicked nation. But as the president nonchalantly waltzed out to his podium 53 minutes (and 3 days) late, the disquieting sensation had already begun to settle in on even his most ardent supporters: Obama is simply not up to this job.

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” President Obama had a “substantial role” in negotiating the debt deal, “In the beginning, middle and end, this process moved forward because of the president’s leadership.” White House Press Secretary Jay Carney

Read more at Whiteboard Archives at

The most conservative Senate Republicans — along with a handful of liberal Democrats who think it went too far — voted against the debt bill.

One senator who didn’t fit that category was moderate Democrat Ben Nelson, who also voted no, but he’s up for re-election in 2012.

Here’s the full list of the 26 senators who voted against the bill:

Kelly Ayotte (R-NH)
Saxby Chambliss (R-GA)
Dan Coats (R-IN)
Tom Coburn (R-OK)
Jim DeMint (R-SC)
Kirsten Gillibrand (D-NY)
Lindsey Graham (R-SC)
Chuck Grassley (R-IA)
Tom Harkin (D-IA)
Orrin Hatch (R-UT)
Dean Heller (R-NV)
Jim Inhofe (R-OK)
Ron Johnson (R-WI)
Frank Lautenberg (D-NJ)
Mike Lee (R-UT)
Bob Menendez (D-NJ)
Jeff Merkley (D-OR)
Jerry Moran (R-KS)
Ben Nelson (D-NE)
Rand Paul (R-KY)
Marco Rubio (R-FL)
Bernie Sanders (I-VT)
Jeff Sessions (R-AL)
Richard Shelby (R-AL)
Pat Toomey (R-PA)
David Vitter (R-LA)

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Margaret Thatcher

As the Oscar buzz surrounding actress Meryl Streep keeps growing — thanks to her portrayal of Margaret Thatcher, it’s worth remembering one of the real Iron Lady’s most famous observations: that any housewife could manage the British economy.

President Obama should heed that advice, and realize that economy begins at home. Unfortunately, his recent statements on the economy give little reason for hope on that front.

Iain Murray’s  full article “President Obama Doesn’t Know the First Thing About Economics”  can be found at Fox News