44 The Obama Presidency
Live Fact Check
"We have known for decades that our survival depends on finding new sources of energy. Yet we import more oil today than ever before."
According to the Energy Information Administration, the official keeper of energy stats for the U.S. Department of Energy, oil imports to the U.S. fell through 2008 and demand is projected to continue to fall through 2009. --Frank Ahrens
"Over the next two years, this plan will save or create 3.5 million jobs."
That was the estimate for the size of the stimulus package President Obama asked for of more than $830 billion. But as the package was whittled down in Congress to $787 billion, Mark Zandi, chief economist for Moody's Economy.com, and other outside analysts have lowered their projections to just more than 2 million jobs saved or created.
"You should also know that the money you've deposited in banks across the country is safe; your insurance is secure; and you can rely on the continued operation of our financial system."
If you have more than $250,000 in a bank, it is not necessarily covered by federal insurance. Further, insurance companies are struggling and state guarantee pools have only limited coverage. --Frank Ahrens
"Too many bad loans from the housing crisis have made their way onto the books of too many banks."
Banks actually created pools of loans or bought loans for profit. Bad loans did not wander onto balance sheets by themselves. --Frank Ahrens
"As for our auto industry, everyone recognizes that years of bad decision-making and a global recession have pushed our automakers to the brink. We should not, and will not, protect them from their own bad practices."
This is part of the story. The other part is trade barriers set up by foreign nations to limit the import of U.S. vehicles. South Korea, for instance, has until recently been a market largely closed to Detroit automakers, thanks to high tariffs, while Americans bought Hyundais and Kias by the thousands. --Frank Ahrens
"And I believe the nation that invented the automobile cannot walk away from it."
It's doubtful that President Obama is referring here to Germany, home of Karl Friedrich Benz, inventor of the first true, four-wheel, gasoline-powered, internal-combustion-engine auto, or his contemporary, Gottlieb Wilhelm Daimler, who did same. America -- Henry Ford -- invented mass production of the auto. --Frank Ahrens
From earlier in the speech
"A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future. Regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn't afford from banks and lenders who pushed those bad loans anyway."
By pairing it with the Bush tax cuts and housing boom, Obama here casts financial deregulation as something that happened only this decade, under Bush. It is true that several key deregulatory moves occurred this decade, including a little-noticed 2004 SEC decision that allowed investment banks to greatly increase their debt levels, which helped drive their move into mortgage securities. But other key actions occurred during the 1990s, such as the repeal of the Glass-Steagall Act, which took down the wall between commercial and investment banks and was supported by many Democrats in Congress and by Robert Rubin, mentor to many Obama economic advisers. Rubin also fought attempts to regulate credit default swaps, which played a big role in the current crisis. --Alec MacGillis
"Yesterday, I held a fiscal summit where I pledged to cut the deficit in half by the end of my first term in office."
That's going to be a tough one. President Obama wants to halve the national deficit over the next four years, largely by cutting spending in the Iraq and Afghanistan wars and raising taxes. But Dave Walker, the former Comptroller General of the Government Accountability Office, warns that tax hikes and slashing war spending will barely make a dent in the deficit and debt without serious reform to government entitlement programs -- Social Security, Medicare and Medicaid. Without these reforms, Walker argues the debt will grow to 2.5 times the gross domestic product over the next 30 years, as the Baby Boomers enter the entitlement system. --Frank Ahrens
"In this budget, we will end education programs that don't work and end direct payments to large agribusinesses that don't need them."
We won't know the details backing up this claim until the budget is released. But it is doubtful that Obama will be able to save very much in cutting education programs, given that the bulk of the federal education budget goes into supplementary programs such as Title I, for schools with high levels of low-income students, and IDEA, for students with special needs. In fact, his stimulus plan increased funding in both of those areas.
Secondly, Obama's promise to attack subsidies for big agribusiness is undermined by the fact that he voted for the $290 billion farm bill in 2008, which, as critics like John McCain noted, continued big corporate subsidies. --Alec MacGillis
Posted at 9:01 PM ET on Feb 24, 2009
44 The Obama Presidency
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