When Barack Obama promised change, this wasn't what Wall Street was hoping for.
The market was down, big time, today as investor came to grips with an Obama administration and its taxing impact on the investor class.
Today's Yahoo.com headline said it all: "Stocks fall as investors ponder Obama presidency"
Reports Yahoo: "A case of post-election nerves sent stocks plunging Wednesday as investors, again anxious about a recession, began questioning what impact a Barack Obama presidency will have on business and the overall economy. The Dow Jones industrials dropped more than 400 points and the major indexes all fell more than 4 percent.
Stocks fell initially as investors cashed in gains after a six-day run that lifted the Standard & Poor's 500 index more than 18 percent. But the selling picked up momentum as the market worried anew about the weakness of the economy and pondered what an Obama administration might do."
That's the thing about Wall Street. It's not neither red nor blue, just green - as in the color of money. With Obama promising protectionist policies that would financially penalize U.S. companies sending jobs overseas, and gearing up to hike taxes on the wealthy, and on all investors via a capital gains tax, Wall Street is already worried about that Obama might damage, and not help, the U.S. economy at a particularly fragile moment.
Regime change in Washington usually bodes well for the stock market. The stock market rose 2% the day after Ronald Reagan was elected and hasn't suffered a significant loss since Franklin Delano Roosevelt was re-elected in 1940 (down 2% the day after that election).
But not this time. I'm not a big fan of omens and President-elect Obama deserves a fair shot. But there is little question that, already, investors don't like what they see.
In other Obama-related news, we can also begin wondering what impact the new president will have on the technology sector. Most pundits see an Obama administration as a net-plus for the industry, with particular optimism in the life sciences (especially stem cell companies) and "green" technology markets.
Yahoo reports that Obama is also expected to name the first federal chief technology officer and national cyber adviser, creating the government's two highest-level technology positions. Plus, industry analysts said recently they were expecting a nearly 4 percent increase in government IT spending during the next five years, regardless of the outcome of the election.
"There is going to be a huge emphasis on technology," said Olga Grkavac, executive vice president of the Information Technology Association of America. "And that is encouraging. The use of technology in his campaign has been groundbreaking."
A deeper, much more detailed analysis of technology in the age of Obama can be found in a new report called "Comparing the Candidates’ Technology & Innovation Policies" by The Information Technology & Innovation Foundation.
Here's a good cut from the report, assessing what would happen under an Obama White House:
"Barack Obama’s approach to technology and innovation policy engages the government as an active partner alongside industry in setting a national technology and innovation agenda. More than McCain, Obama would substantially increase government funding for science and technology R&D, including doubling the current level of federal R&D funding for basic research and targeting additional funding towards specific initiatives, such as $150B for clean energy programs and $50B for health information technology. Whereas a McCain Administration would seek to leverage existing federal agencies tasked with innovation activity, such as the Manufacturing Extension Program (MEP) within the Department of Commerce, and resist creating new bureaucracies, an Obama Administration would be more willing to reevaluate the current federal innovation infrastructure and reorganize it as necessary, such as through the creation of a new Advanced Manufacturing Fund."
"McCain, believing that innovation is fueled primarily by risk capital, skilled workers, incentives for entrepreneurs, a light regulatory framework, and open access to markets, would place most emphasis for innovation on the marketplace, and be less focused than Obama on having government take a very active role in proactively establishing and aggressively funding a national innovation and R&D agenda. Obama’s policies recognize the private sector as the central source of economic growth and prosperity and appreciate the need to create a favorable regulatory, tax, and investment climate for it, but also affirm that government can play a proactive and constructive role in helping the private sector commercialize its innovations."
One big issue that impacts the tech sector is net neutrality. Here, Obama has been a big advocate. This, from the Obama web site: “A key reason the Internet has been such a success is because it is the most open network in history. It needs to stay that way. Barack Obama strongly supports the principle of network neutrality to preserve the benefits of open competition on the Internet.”
He also wants to wire the entire country via broadband. Again, from the Obama web site:
“As a country, we have ensured that every American has access to telephone service and electricity, regardless of economic status, and I will do likewise for broadband Internet access. Full broadband penetration can enrich democratic discourse, enhance competition, provide economic growth, and bring significant consumer benefits. Moreover, improving our infrastructure will foster competitive markets for Internet access and services that ride on that infrastructure. Market forces will drive the deployment of broadband in many parts of the country, but not all. To get true broadband deployed in every community in America, we need to reform the Universal Service Fund, make better use of the nation’s wireless spectrum, promote next-generation facilities, technologies, and applications, and provide new tax and loan incentives.”
We'll here more from Obama and his technology czar down the road, but for now it looks like technology has a champion in Barack Obama.
Hopefully, four years from now, Wall Street can say the same.