Obama Connects Most of the Dots
Aware that many Americans are wondering how all his different economic programs and policies fit together, President Obama today tried to connect the dots.
He explained why he believes each of his various short-term economic initiatives is a critical element of the economic recovery, how his ambitious long-term budget proposals are essential to building an economy that won't crash like this one did, and that, although some initiatives are already producing glimmers of hope, most of the hard work still lies ahead.
At the heart of a forceful speech delivered at Georgetown University, Obama placed powerful biblical imagery from Jesus's Sermon on the Mount, likening the boom-and-bust economy he inherited to a house built on sand and the future U.S. economy he is working toward one built on a rock.
He strongly rebutted the criticism, largely from Republicans, that he shouldn't be spending so much either now or in the long term. He noted how it is economic common sense that "the last thing a government should do in the middle of a recession is to cut back on spending." And, in an analogy that resonated particularly well with an audience heavy on college students, he talked about the need to invest in the future.
"Look, just as a cash-strapped family may cut back on all kinds of luxuries but will still insist on spending money to get their children through college -- will refuse to have their kids drop out of college and go to work in some fast food place, even though that might bring in some income in the short term, because they're thinking about the long term -- so we as a country have to make current choices with an eye to the future."
He stressed his dedication to what he called the "five pillars" of his new "house upon a rock": "Number one, new rules for Wall Street that will reward drive and innovation, not reckless risk-taking. Number two, new investments in education that will make our workforce more skilled and competitive. Number three, new investments in renewable energy and technology that will create new jobs and new industries. Number four, new investments in health care that will cut costs for families and businesses. And, number five, new savings in our federal budget that will bring down the debt for future generations."
He even suggested that entitlement reform -- including putting Social Security "on firmer footing" -- and tax reform would be on his agenda after those other issues were addressed.
But he failed to persuasively rebut the most urgent critique of his economic policies -- one that can't be written off either to reflexive partisanship from Republicans or defensiveness from the Washington establishment.
Obama raised it on his own, noting that some critics think he has "been too timid" about shoring up the banking system. "This is essentially the nationalization argument that some of you may have heard. And the argument says that the federal government should have already preemptively stepped in and taken over major financial institutions the way that the FDIC currently intervenes in smaller banks and that our failure -- my administration's failure -- to do so is yet another example of Washington coddling Wall Street: 'Why aren't you tougher on the banks?'"
But his answer was vague and unconvincing: "So let me be clear. The reason we have not taken this step has nothing to do with any ideological or political judgment we've made about government involvement in banks. It's certainly not because of any concern we have for the management and shareholders whose actions helped to cause this mess. Rather, it’s because we believe that preemptive government takeovers are likely to end up costing taxpayers even more in the end, and because it’s more likely to undermine than create confidence."
Obama's belief has never been in question. It's the reasoning behind that belief that we've been missing, as well as the source of his faith in the judgment of economic advisers. But he once again left us all in the dark on that count.
Obama ended his speech with his most extensive critique yet of the weak-willed and easily distracted Washington establishment whose support he needs to get his agenda put into law. He called on leaders to toughen up and act in a sustained fashion.
"For too long, too many in Washington put off our decisions for some other time on some other day. There has been a tendency to spend a lot of time scoring political points instead of rolling up sleeves to solve real problems. There's also an impatience that characterizes this town, an attention span that has only grown shorter with the 24-hour news cycle, that insists on instant gratification in the form of immediate results or higher poll numbers.
"When a crisis hits, there's all too often a lurch from shock to trance, with everyone responding to the tempest of the moment until the furor has died down and the media coverage has moved on to something else, instead of confronting the major challenges that will shape our future in a sustained and focused way. This can't be one of those times: the challenges are too great; the stakes are too high.
"I know how difficult it is for members of Congress in both parties to grapple with some of the big decisions we face right now. I'd love if these problems were coming at us one at a time instead of five or six at a time. It's more than most Congresses and most presidents have to deal with in a lifetime.
"But we have been called to govern in extraordinary times. And that requires an extraordinary sense of responsibility to ourselves, to the men and women who sent us here, to the many generations whose lives will be affected for good or for ill because of what we do here."
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