October 15th, 2009
08:05 AM ET

Dear President Obama #269: The Dow – hardly average now

Reporter's Note: President Obama has made a lot of trips around the country since taking office. I keep hoping he’ll send at least a postcard in return for all these letters I’m writing. Maybe a nice woodland scene with a woodchuck, and a lovely “Visit Beautiful Pennsylvania” inscribed alongside. That would be nice.

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Tom Foreman | BIO
AC360° Correspondent

Dear Mr. President,

Congratulations! The Dow Jones Industrial Average has finally crawled back above 10,000, closing there for the first time in more than a year, and I couldn’t be happier! Well, that’s not entirely true. I guess I could be happier if I truly understood what it meant. In candor, I long ago lost my confidence in the market as a clear indicator of what is happening in the economy, but the legions of winged monkeys we call financial gurus say this is positive news, so I won’t throw water on the witch. I’ll just join in the party.

I spend a lot of time keeping an eye on a wide range of economic indicators, and they are still offering a very mixed picture of what is going on. Some things seem to have bottomed out, or may be moving slightly up again, like housing. Some things still seem bad and getting worse, like jobs. And some things, like the market seem to be getting better, then worse, then better, and on and on it goes.

The numbers on all these fronts are, frankly, far too daunting for a mere mortal to sort out. But the Dow’s big win matters anyway; not because it will affect everyone (because it won’t,) not because we all hold stock in companies that will be caught up in some new market wave (because we don’t,) but because it offers a little hope in a year that has seen precious little of it. And here’s the peculiar part: I’m not talking about hope for normal voters. I’m actually talking about hope for all your big political pals, and those titans of industry with whom you rub elbows.

I’ve become convinced over the years, that for as much as big shots like to pretend that they base their decisions on reports, studies, facts, and learned opinions, they actually make their choices like most of us do: On a gut feeling. If they “think” your programs are working and the economy is getting better, they are more likely to get behind it, and that in turn will fulfill the prophecy. And these folks see the Dow as the Magic 8-Ball of financial trends.

So keep that in mind as you speak out on the economy in coming weeks, remember that the numbers matter and can’t be denied; but the general impression may have more impact., and whether the Dow stays above 10,000 matters less than the idea that it appears to be moving in the right direction. Call if you can. Always happy to talk.



Follow Tom on Twitter @tomforemancnn.

Find more of the Foreman Letters here.

soundoff (8 Responses)
  1. EVE

    Very good reading!! Great points. I believe you are RIGHT ON about the DOW and who it mostly impacts and our economy indicators confusing picture!!!!

    October 15, 2009 at 10:19 am |
  2. Norma Labno



    Lot of interesting food for comment in todays Letter To The President!

    Agree with your statement, "the Dow is not a clear indicator of how
    the economy is doing.

    And, by the way – I would throw water on the witch (to rearrange your
    phrase) for at the moment I hold the Dow Jones and the Big Wigs it
    represents in the lowest esteem! (Cuthroats & thieves might be going
    only a tad too far – as far as I'm concerned!)

    And regarding your remark about the Dow being the Magic
    8 ball, the Dow was the 8 Ball alright and most of us were caught
    square behind it & fell hard with the rest of the pins!!!

    Would the Dow put us behind the 8 Ball again? In a New York Minute
    if there were a penny or two in it for them! (Would they raid our
    treasure again – via govt. bailouts given the chance again – *amn
    straight they would!!!)

    norma from nv

    October 15, 2009 at 9:38 am |
  3. Zo

    You know what ask yourself that question. It's not enough Pres. O has restored or restoring the market. NOW you want him to define it. When did the definition of the market change?

    October 15, 2009 at 9:14 am |
  4. Enough

    The Dow isn't up because of anything Obama did. The economy will recover, it would have been well on it's way to recover if he was NOT president, his policies are stalling the recovery and will keep unemployment high. The Democrats are using businesses as their ATM's and putting extra burdens on us. We will intentionally stay down sized, cannot afford expansion under this Democratic control. Too bad Democrats don't understand the small business is the key to recovery.

    October 15, 2009 at 9:04 am |
  5. Beck

    Great post. I agree with you that I think so much of this is emotional and not based on any facts or figures. I had coffee with a friend yesterday who said, "I used to sell equity research and even I didn't read it. I read the summary on the first page."

    October 15, 2009 at 8:43 am |
  6. Ray @ Financial Highway

    Interesting, I wouldn't attach too much importance to dow reaching 10K. Dow is no longer an important index and reaching 10K is it anything meaningful, I wrote about the uselessness of the dow on my blog today.

    October 15, 2009 at 8:42 am |