Much as I admire Obama, the thought that would not leave me alone as I listened to his speech was "diminishing returns". It was a good campaign speech, beautifully delivered, and helped by the very flattering comparison with Bobby Jindal's weirdly robotic response. (How do they get people to accept this assignment?) But it was a speech we have now heard many times. The instant polling suggested that listeners loved it, which surprised me a little. People are inclined to be patient with Obama and know he is not to blame for the mess, but I wonder how much longer they will love this kind of speech. This time next year, an address so heavy on inspiration and so light on policy surely is not going to work.
Granted, one month in, Obama has on the books a massive and mostly good stimulus bill. It is not quite as big or as front-loaded as it looks, or as it should be--see my recent column in National Journal on this [link expires in ten days]. But a president who has got this done can hardly be accused of inactivity. High marks, then, on the stimulus. But where is the banking plan, without which the stimulus won't work? Barring a perceptible uptick in the anti-banker rhetoric, nothing new on that in the speech.
We heard increasingly confident commitments on healthcare reform, education reform, and alternative energy--all of them potentially very costly, with expenses going way beyond the supposedly temporary provisions in the stimulus. This alongside a restatement of the new promise to halve the deficit to around $500bn by the end of 2012. I am struggling to see how those things fit together, unless Obama is planning much bigger tax increases than he has so far indicated. And, by the way, why promise to halve the deficit by 2012 in any case? Premature efforts to rein in the budget deficit pushed Japan back into recession during its Long Slowdown. It is too soon to know when or how quickly borrowing should be brought back under control. But it is not too soon to start thinking about how it should be done, when the time is right. I don't doubt that the administration is indeed thinking hard about that. It just isn't telling anybody else just yet.
Maybe the budget "blueprint" will tell us more...
I agree with Clive's opinion of Obama's speech as unrealistic campaign, actually boilerplate teleprompter rhetoric, as was Bernanke's positivistic speech, all following Bill Clinton's advice to spread a foggy bottom optimism intended to obscure the seemingly endless stream of gloomy economic facts. As a realist not pessimist, I see these ruminations quite like those of the false Bible prophets predicting a bright future in full view of imminent disaster. In our case, these prophets predict an eventual return to a forever departed false prosperity of our prodigal days of free US lunches and an irrationally exuberant life style subsidized by the rest of the world.
Herman, retired, for 50 years an industrial problem solving and troubleshooting chemist.
Clive, maybe Obama believes (as I do) that dealing with the crisis that our health care system will also help stimulate the economy.
Because right now, it's nearly as big a drag on economic growth as the derivative crisis.
The two possible exceptions are insurance and pharma, both likely to have their gravy-train profits curtailed.
I don't have a problem with that.
I think only the first 5 minutes or so was campaign stuff. The rest was a big time agenda from someone in a position to carry out it. He had to sell the economic agenda in this speech -- stimulus, housing, banking. He had to be truthful about the economy and positive about the long term. I think he pulled it off.
On the deficit, Obama's point is to reduce long term entitlement spending, particularly on health care, through reform, to spend less in Iraq, and to let some of the Bush tax cuts expire on the top 5 percent. The only anti-stimulative measure there is the income tax.
There is absolutely zero logic to the line of thinking that modifying the health care system will improve our economy. You know who needs health care? Poor people at the bottom of the totem pole. Is the establishment of health care for these people imperative to the success of the American economy? Absolutely not. They play a very limited role in the success of the economy. They wouldn't have jobs if businesses didn't have the financial assets to employ them. My tone might create the impression that I'm a cold, harsh realist. I am. The health care system should not be a priority at all. We shouldn't even be talking about it. What we should be talking about is the true cause behind the sub-prime mortgage collapse, which was in fact the CRA passed by the Clinton Administration in 1996. That bill forced banks to make loans to applicants who couldn't afford to pay them back because the government wanted to see more people in homes coupled with a less restrictive flow of credit. As a result, the banks were saddled with loans they knew would never be repaid, and viola! A whole bunch of debt we just discovered a few months ago. But none of that information is readily available in daily news publications because journalists have a collective hard-on for Obama. What an absolute travesty.
Yes, Clive, let's flog the folks at home with more depressing economic details- just what they need after every headline sinks them ever deeper into oblivion.
Jesus, give the guy a break. At least he can articulate a sentence. Wasn't Bush on vacation by this time in his presidency?
Bill, your claim that poor people are the only ones who need health care is just ignorant.
Half of all personal bankruptcies in America are caused by illness and medical bills (http://www.consumeraffairs.com/news04/2005/bankruptcy_study.html).
Half!
And you say it's a poor people problem and they just need to go ahead and die if they're going to do it.
So when I say you're ignorant, I'm being as generous as possible.