Billed as a major speech delivered at Federal Hall in New York, at the foot of the nation's financial center, Obama said the consequences of the financial system collapse that began a year ago, "spread far beyond the streets of lower Manhattan," calling for a new order of "clear rules of the road that promote transparency and accountability."
"That's how we'll make certain that markets foster responsibility, not recklessness, and reward those who compete honestly and vigorously within the system, instead of those who try to game the system," he said.
It was, in a sense, a get-tough week for Obama, who sparked criticism at home and abroad for imposing a tariff on Chinese tires that some predict will start a trade war with an important economic ally.
China's commerce minister, Chen Deming, said the tariff "sends the wrong signal to the world," The Washington Post reported Tuesday. He also said China would explore retaliatory action, including trade barriers for U.S. autos and poultry products.
At Federal Hall, however, the familiarity of the president's proposals were not the reason the speech had minimal impact on the stock market. More likely, it was the increasing odds that the proposals first unveiled in June may never have a chance to make it into law.
It works this way. When regulators -- or presidents -- threaten banks with tighter restrictions or contemplate rules that make it harder for banks to make a profit, stocks go down. After Obama's speech Monday, U.S. stock markets, which were marginally lower most of the morning, turned higher.
The problem, The New York Times reported Tuesday, may be too much success. It takes the heat of a runaway fire to make significant regulatory changes, such as the formation of a Consumer Financial Protection Agency, a key component of the White House reform package. But, as the Obama administration is quick to point out, that urgency is receding. The economic crisis has come back from the brink, Treasury Secretary Timothy Geithner said.
On the political front, Republicans are capitalizing on the image problem that comes after massive bailout programs, no matter that the $700 billion Troubled Asset Relief Program was assembled by the previous Republican administration.
Regardless, Republicans are pouncing on the theme that Obama's approach is bigger, more intrusive government. No matter how many times Obama and Geithner say they don't want to run General Motors Co., American International Group or Bank of America, "the president has offered a reform proposal that would grant broad new authorities to government bureaucrats while intruding in private markets and restricting personal choice," Rep. Spencer Bachus, R-Ala., said.
In market action Tuesday, the Nikkei 225 in Japan rose 0.15 percent. The Hang Seng index in Hong Kong fell 0.31 percent. The Singapore Straits Times dropped 0.05 percent, while the S&P/ASX in Australia rose 0.2 percent.
In midday trading in Europe, the FTSE 100 in Britain rose 0.39 percent, while the DAX 30 in Germany added 0.15 points, less than 0.01 percent. The CAC 40 in France rose 0.33 percent. The pan-European DJStoxx 600 rose 0.06 percent.
Copyright 2009 by United Press International.