President Barack Obama compared the stock market Tuesday to the daily tracking polls used during campaigns, saying that paying too close attention to how Wall Street "bobs up and down" could lead to bad long-term policy. "What I'm looking at is not the day-to-day gyrations of the stock market, but the long-term ability of the United States ... to regain its footing," Obama said after meeting in the Oval Office with visiting British Prime Minister Gordon Brown.
He said the developments he follows most closely are whether lending is flowing more freely, businesses are investing and the unemployed are going back to work.
The president said he is "absolutely confident" that those things will happen. But Obama also said that it will take time for the mistakes of the past to work their way through the system and that the spectacular losses happening now are a "natural reaction" to those mistakes.
"There are a lot of losses that are working their way through the system and it's not surprising the market is hurting as a consequence," he said. "`We dug a very deep hole for ourselves. There were a lot of bad decisions that were made. We are cleaning up that mess. It's going to be sort of full of fits and starts, in terms of getting the mess cleaned up, but it's going to get cleaned up. And we are going to recover, and we are going to emerge more prosperous, more unified, and I think more protected from systemic risk."
On Monday, the Dow Jones industrial average plunged far below the 7,000 mark to end at 6,763 — the lowest close for the Dow since April 25, 1997. The 300-point drop Monday leaves the index more than 52 percent below its record high of 14,164.53 set in October 2007.
"The stock market is sort of like a tracking poll in politics. It bobs up and down day-to-day," Obama said. "And if you spend all your time worrying about that, then you're probably going to get the long-term strategy wrong."
"I think what we're seeing is that as people absorb the depths of the problem that existed in the banking system, as well as the international ramifications of it, that there's going to be a natural reaction," Obama said of the market. But then he added that "profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you've got a long-term perspective on it."
Later, White House press secretary Robert Gibbs said the American people understand the economy is not going to improve suddenly and that "we've been heading in this direction in a trend line for quite some time."
He said the developments he follows most closely are whether lending is flowing more freely, businesses are investing and the unemployed are going back to work.
The president said he is "absolutely confident" that those things will happen. But Obama also said that it will take time for the mistakes of the past to work their way through the system and that the spectacular losses happening now are a "natural reaction" to those mistakes.
"There are a lot of losses that are working their way through the system and it's not surprising the market is hurting as a consequence," he said. "`We dug a very deep hole for ourselves. There were a lot of bad decisions that were made. We are cleaning up that mess. It's going to be sort of full of fits and starts, in terms of getting the mess cleaned up, but it's going to get cleaned up. And we are going to recover, and we are going to emerge more prosperous, more unified, and I think more protected from systemic risk."
On Monday, the Dow Jones industrial average plunged far below the 7,000 mark to end at 6,763 — the lowest close for the Dow since April 25, 1997. The 300-point drop Monday leaves the index more than 52 percent below its record high of 14,164.53 set in October 2007.
"The stock market is sort of like a tracking poll in politics. It bobs up and down day-to-day," Obama said. "And if you spend all your time worrying about that, then you're probably going to get the long-term strategy wrong."
"I think what we're seeing is that as people absorb the depths of the problem that existed in the banking system, as well as the international ramifications of it, that there's going to be a natural reaction," Obama said of the market. But then he added that "profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you've got a long-term perspective on it."
Later, White House press secretary Robert Gibbs said the American people understand the economy is not going to improve suddenly and that "we've been heading in this direction in a trend line for quite some time."
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