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Opinion: Barack Obama talks about the economy

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Dang. Looks like we’ll have to wait for word on who will replace Hank Paulson at Treasury -- President-elect Barack Obama had nothing at all to say on that issue during his first post-election news conference. On the other hand, that’s former Fed chairman (and well-known inflation hawk) Paul Volcker standing just behind him to his left in the photo, and it seems unlikely that Volcker got there by accident. (The woman on Obama’s right is Michigan Gov. Jennifer Granholm; we’ll get to her symbolism in a moment.) Anyway, Obama offered little by way of specifics, hewing closely to the disciplined vacuousness of his campaign. The only nuggets of solid information I gleaned, excluding some unusually detailed intelligence about the future First Dog, were as follows:

  • The top priority on the economy is passing a stimulus package, which Obama said shouldn’t wait for his inauguration. And the most important piece of that is extending unemployment benefits. That’s a good move, one that has a track record of actually stimulating the economy. The money quote: ‘We are going to have to focus on jobs, because the hemorraging of jobs has an impact on consumer confidence’ as well as depressing spending on goods and services. He added, ‘I want to see a stimulus package sooner rather than later.’
  • Priority No. 2 appears to be pouring money into state and local governments to reduce the layoffs and spending cuts they’re facing.
  • The auto industry is likely to get some love, but not necessarily the kind it’s looking for. Calling automakers ‘the backbone of American manufacturing’ and a ‘critical part’ of the effort to reduce dependency on foreign oil, Obama said he wanted to see the administration speed up the delivery of the $25 billion in loans Congress has already approved. But he stopped short of endorsing the additional $25 billion the Big Three are begging for, saying instead that he plans to ‘work on additional policy options’ to help the industry ‘weather the financial crisis’ and produce more fuel-efficient vehicles. Maybe I’m projecting here, but that didn’t sound like an endorsement of a bridge loan to help GM buy Chrysler.
  • Obama sounded a populist note about the $700 billion Wall Street bailout, a.k.a. the Trouble Asset Recovery Program, saying he wanted to review the Treasury Department’s implementation to make sure it was offering enough help to homeowners but not too much to Wall Street executives. Look for more efforts to aid homeowners avoid foreclosure.
  • Off the topic of the economy, Obama said he was in no hurry to dash off a response ‘in simply a knee-jerk fashion’ to Iranian President Mahmoud Ahmadinejad’s congratulatory letter. He called Iran’s attempt to develop nuclear weapons unacceptable and said the country’s ‘support of terror organization ... has to cease.’ But he also said, ‘We have only one president at a time.... I am not president. I will not be until January 2009.’

For whatever it’s worth, the Dow Jones Industry Average gave up about half of its gains today during the course of Obama’s remarks.
AP Photo/Charles Dharapak


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