Wednesday, February 25, 2009

Address To The Nation

Pat Buchanan, being Pat Buchanan, didn't mean it favorably; but this afternoon on MSNBC, Buchanan commented this afternoon "Barack Obama emerged last night as a Great Society liberal." Sorry (not) to disabuse the former Nixon speechwriter and Presidential aspirant, syndicated columnist, and so much else, but the Great Society was, on the whole, a success, especially until derailed by the Vietnam War.

And I guess the public agrees. A CNN/Opinion Research Survey taken promptly after completion of Pesident Obama's non-State of the Union speech to a joint session of Congress found

Eighty-five percent of those polled said the president's speech made them feel more optimistic about the direction the country is headed in the next few years, with 11 percent indicating the speech made the feel more pessimistic.

Eighty-two percent of speech watchers say they support the economic plan Obama outlined in his prime-time address, with 17 percent opposing the proposals.

Sure, the polling director cautioned the numbers "are no better or worse that Bill Clinton or George W. Bush got after their first speeches to Congress," but, for whatever significance one wants to vest in the results, Americans certainly like what they heard.

As well they should have. Obama laid out the issues in a manner likely to be understood those of us not economists, as when he explained

The concern is that if we do not re-start lending in this country, our recovery will be choked off before it even begins.

You see, the flow of credit is the lifeblood of our economy. The ability to get a loan is how you finance the purchase of everything from a home to a car to a college education; how stores stock their shelves, farms buy equipment, and businesses make payroll.

But credit has stopped flowing the way it should. Too many bad loans from the housing crisis have made their way onto the books of too many banks. With so much debt and so little confidence, these banks are now fearful of lending out any more money to households, to businesses, or to each other. When there is no lending, families can't afford to buy homes or cars. So businesses are forced to make layoffs. Our economy suffers even more, and credit dries up even further.

Still, this plan will require significant resources from the federal government - and yes, probably more than we've already set aside. But while the cost of action will be great, I can assure you that the cost of inaction will be far greater, for it could result in an economy that sputters along for not months or years, but perhaps a decade. That would be worse for our deficit, worse for business, worse for you, and worse for the next generation. And I refuse to let that happen.

Striking a populist note, the instinctively and stylistically non-populist Obama advocated "finally ending the tax breaks for corporations that ship our jobs overseas" and noted

I intend to hold these banks fully accountable for the assistance they receive, and this time, they will have to clearly demonstrate how taxpayer dollars result in more lending for the American taxpayer. This time, CEOs won't be able to use taxpayer money to pad their paychecks or buy fancy drapes or disappear on a private jet. Those days are over.

And with GOP mouthpieces like Limbaugh and Hannity incessantly claiming that Obama intends to raise taxes, the President made clear:

In order to save our children from a future of debt, we will also end the tax breaks for the wealthiest 2% of Americans. But let me perfectly clear, because I know you'll hear the same old claims that rolling back these tax breaks means a massive tax increase on the American people: if your family earns less than $250,000 a year, you will not see your taxes increased a single dime. I repeat: not one single dime. In fact, the recovery plan provides a tax cut - that's right, a tax cut - for 95% of working families. And these checks are on the way.

Not all the speech was sound, of course. Obama again promoted charter schools as a prescription for our education woes suggesting, with appointment of Chicago's own Arne Duncan as Secretary of Education, that he is not triangulating or trying to appease the corporate elements of his party, but instead severely misguided.

As economist Paul Krugman has pointed out, Obama was insufficiently bold with his stimulus package- and may prove to be so in his general management of the economy. Still, the President appears to have convinced the nation that, above all, he is committed to finding what will work, and has impressed the nation with his seriousness. The latter may be setting the bar rather low but, judged against his opposition in November and the response of the Republican spokesman following the address, is quite an achievement.

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