Please excuse me for whacking at low-hanging fruit today. Apparently the pushback du jour against the stimulus bill is that there’s no rush, and President Obama is just fear mongering.
Is this rich, or what? The same people who stampeded us into Iraq, whose biggest talking point is vote for us or the terrorists gonna GITCHA think President Obama is fear mongering.
I got the ostrich graphic from an old Michelle Malkin post from June 2007. Little Lulu was derisive and incredulous that people were not cowering in terror because of a technically impossible “plot” to destroy JFK airport in Queens. Today she’s hooting in derision at President Obama because of his “fear-mongering press conference.”
See the ostrich, dear? That’s you.
Which takes me back to one of the questions asked last night. Jennifer Loven of the Associated Press asked,
Thank you, Mr. President. Earlier today in Indiana, you said something striking. You said that this nation could end up in a crisis without action that we would be unable to reverse. Can you talk about what you know or what you’re hearing that would lead you to say that our recession might be permanent, when others in our history have not? And do you think that you risk losing some credibility or even talking down the economy by using dire language like that?
I’ll add President Obama’s response in a second, but I want to dwell on the fear thing. Speaking of the Great Depression, Franklin Roosevelt said that the only thing we have to fear is fear itself, meaning that in 1933 fear was keeping money out of circulation, and because money was not being circulated the Depression continued. Now, some might argue that the issue was somewhat more complicated then as it is now. But the basic parameters of the crises are essentially the same — lack of demand for goods and services is causing the economy to shut down.
So why couldn’t President Obama say the only thing we have to fear is fear itself? Because we do have something else to fear — the damn whackjob braindead Republican Party. As in John McCain saying it’s not a stimulus bill, it’s a spending bill. And I’m sure you heard about Michael Steele explaining that government jobs are not jobs.
So President Obama couldn’t just reassure people. He had to simultaneous reassure citizens that the economy can be stimulated while putting fear into the hearts of obstructionist Republicans that it’s time for them to haul their heads out of their asses and pay attention to the real world for a change.
Now, here is President Obama’s response to Ms. Loven’s question:
THE PRESIDENT: No, no, no, no — I think that what I’ve said is what other economists have said across the political spectrum, which is that if you delay acting on an economy of this severity, then you potentially create a negative spiral that becomes much more difficult for us to get out of. We saw this happen in Japan in the 1990s, where they did not act boldly and swiftly enough, and as a consequence they suffered what was called the “lost decade” where essentially for the entire ’90s they did not see any significant economic growth.
So what I’m trying to underscore is what the people in Elkhart already understand: that this is not your ordinary run-of-the-mill recession. We are going through the worst economic crisis since the Great Depression. We’ve lost now 3.6 million jobs, but what’s perhaps even more disturbing is that almost half of that job loss has taken place over the last three months, which means that the problems are accelerating instead of getting better.
Now, what I said in Elkhart today is what I repeat this evening, which is, I’m absolutely confident that we can solve this problem, but it’s going to require us to take some significant, important steps.
Step number one: We have to pass an economic recovery and reinvestment plan. And we’ve made progress. There was a vote this evening that moved the process forward in the Senate. We already have a House bill that’s passed. I’m hoping over the next several days that the House and the Senate can reconcile their differences and get that bill on my desk.
There have been criticisms from a bunch of different directions about this bill, so let me just address a few of them. Some of the criticisms really are with the basic idea that government should intervene at all in this moment of crisis. Now, you have some people, very sincere, who philosophically just think the government has no business interfering in the marketplace. And in fact there are several who’ve suggested that FDR was wrong to intervene back in the New Deal. They’re fighting battles that I thought were resolved a pretty long time ago.
Most economists, almost unanimously, recognize that even if philosophically you’re wary of government intervening in the economy, when you have the kind of problem we have right now — what started on Wall Street goes to Main Street, suddenly businesses can’t get credit, they start carrying back their investment, they start laying off workers, workers start pulling back in terms of spending — when you have that situation, that government is an important element of introducing some additional demand into the economy. We stand to lose about $1 trillion worth of demand this year and another trillion next year. And what that means is you’ve got this gaping hole in the economy.
That’s why the figure that we initially came up with of approximately $800 billion was put forward. That wasn’t just some random number that I plucked out of a hat. That was Republican and Democratic, conservative and liberal economists that I spoke to who indicated that given the magnitude of the crisis and the fact that it’s happening worldwide, it’s important for us to have a bill of sufficient size and scope that we can save or create 4 million jobs. That still means that you’re going to have some net job loss, but at least we can start slowing the trend and moving it in the right direction.
Now, the recovery and reinvestment package is not the only thing we have to do — it’s one leg of the stool. We are still going to have to make sure that we are attracting private capital, get the credit markets flowing again, because that’s the lifeblood of the economy.
And so tomorrow my Treasury Secretary, Tim Geithner, will be announcing some very clear and specific plans for how we are going to start loosening up credit once again. And that means having some transparency and oversight in the system. It means that we correct some of the mistakes with TARP that were made earlier, the lack of consistency, the lack of clarity in terms of how the program was going to move forward. It means that we condition taxpayer dollars that are being provided to banks on them showing some restraint when it comes to executive compensation, not using the money to charter corporate jets when they’re not necessary. It means that we focus on housing and how are we going to help homeowners that are suffering foreclosure or homeowners who are still making their mortgage payments, but are seeing their property values decline.
So there are going to be a whole range of approaches that we have to take for dealing with the economy. My bottom line is to make sure that we are saving or creating 4 million jobs, we are making sure that the financial system is working again, that homeowners are getting some relief. And I’m happy to get good ideas from across the political spectrum, from Democrats and Republicans. What I won’t do is return to the failed theories of the last eight years that got us into this fix in the first place, because those theories have been tested and they have failed. And that’s part of what the election in November was all about.
To the same question, would George W. Bush have managed even one coherent sentence? Would he have said anything other than “I disagree” and “I’m workin’ hard and makin’ tough decisions”?
See also Bob Herbert, “The Chess Master.”
