The President on the Economy

The text courtesy of the White House:

THE PRESIDENT: Good afternoon, everybody. I just finished a meeting with my economic team about the current state of our economy and some of the additional steps that we should take to move forward.

It’s been nearly two years since that terrible September when our economy teetered on the brink of collapse. And at the time, no one knew just how deep the recession would go, or the havoc that it would wreak on families and businesses across this country. What we did know was that it took nearly a decade -- how we doing on sound, guys? Is it still going in the press -- okay. What we did know was that it was going to take nearly a decade in order -- can you guys still hear us? Okay. Let me try this one more time.

What we did know was that it took nearly a decade to dig the hole that we’re in -– and that it would take longer than any of us would like to climb our way out. And while we have taken a series of measures and come a long way since then, the fact is, that too many businesses are still struggling; too many Americans are still looking for work; and too many communities are far from being whole again.

And that’s why my administration remains focused every single day on pushing this economy forward, repairing the damage that’s been done to the middle class over the past decade, and promoting the growth we need to get our people back to work.

So, as Congress prepares to return to session, my economic team is hard at work in identifying additional measures that could make a difference in both promoting growth and hiring in the short term, and increasing our economy’s competitiveness in the long term -- steps like extending the tax cuts for the middle class that are set to expire this year; redoubling our investment in clean energy and R&D; rebuilding more of our infrastructure for the future; further tax cuts to encourage businesses to put their capital to work creating jobs here in the United States. And I’ll be addressing these proposals in further detail in the days and weeks to come.

In the meantime, there’s one thing we know we should do -– something that should be Congress’ first order of business when it gets back -- and that is making it easier for our small businesses to grow and hire.

We know that in the final few months of last year, small businesses accounted for more than 60 percent of the job losses in America. That’s why we’ve passed eight different tax cuts for small businesses and worked to expand credit for them.

But we have to do more. And there’s currently a jobs bill before Congress that would do two big things for small business owners: cut more taxes and make available more loans. It would help them get the credit they need, and eliminate capital gains taxes on key investments so they have more incentive to invest right now. And it would accelerate $55 billion of tax relief to encourage American businesses, small and large, to expand their investments over the next 14 months.

Unfortunately, this bill has been languishing in the Senate for months, held up by a partisan minority that won’t even allow it to go to a vote. That makes no sense. This bill is fully paid for. It will not add to the deficit. And there is no reason to block it besides pure partisan politics.

The small business owners and the communities that rely on them, they don’t have time for political games. They shouldn’t have to wait any longer. In fact, just this morning, a story showed that small businesses have put hiring and expanding on hold while waiting for the Senate to act on this bill. Simply put, holding this bill hostage is directly detrimental to our economic growth.

So I ask Senate Republicans to drop the blockade. I know we’re entering election season, but the people who sent us here expect us to work together to get things done and improve this economy.

Now, no single step is the silver bullet that will reverse the damage done by the bubble-and-bust cycles that caused our economy into this slide. It’s going to take a full-scale effort, a full-scale attack that not only helps in the short term, but builds a firmer foundation that makes our nation stronger for the long haul. But this step will benefit small business owners and our economy right away. That’s why it’s got to get done.

There’s no doubt we still face serious challenges. But if we rise above the politics of the moment to summon an equal seriousness of purpose, I’m absolutely confident that we will meet them. I’ve got confidence in the American economy. And most importantly, I’ve got confidence in the American people. We’ve just got to start working together to get this done.

Thank you very much.

While it is reassuring to hear the President speak out on the economy, I am still left somewhat wanting by his remarks. Over the weekend, I chatted with my good friend Norm Jensen who runs the free-thinking blog One Good Move and he remarked that Obama "knows how to give a campaign speech but doesn't know how to give a Presidential one." I think that's a fair assessment but Obama's problems in getting his message across seem deeper than that. If this is his clarion call to action, I suspect the response is going to be muted.

To begin with, I would prefer that the President framed the crisis not just differently but also more succinctly. This is not simply a decade long debacle attributable to George W. Bush, this is a 30 year crisis in the making that needs to be pinned on Ronald Reagan and his misbeggotten policies. I think it important to remember that Reagan didn't just run against Jimmy Carter, he ran against FDR. This entire mess has to be pinned on the GOP going back to Reagan, not for political reasons, but for economic ones. Give the devil his due, this is Reaganomics biting our collective butts.

The economic crisis that we are now living is not some cyclical event where the business cycle needs to work through excess capacity but a structural crisis that is a result of the purposeful assault on the American working class. In 1972, the CPI adjusted wages for the average worker was $738.48 per week. As of July 2010, that figure was $740. for the average American worker, the past forty years has been one of treading water hoping to keep his head above water. To maintain his lifestyle, the recourse has been to drown in debt. Meanwhile, the top one percent have seen their after-tax income triple since 1980 as a percentage of the nation's total income, while the bottom 90 percent have seen their share of the national income erode by 20 percent.

Now contrast that with the situation from 1945 through 1975. Family incomes grew virtually at the same rate in all sections of the population during the first three decades after World War II, with those of the poor growing slightly faster. The lowest fifth of American saw a 120 percent increase in their incomes, the second fifth witnessed a 101 percent rise, the third 107 percent, the fourth 114 percent and the fifth 94 percent. 

There are a number of reasons as to why we are seeing the erosion of the American middle class to which I can point : the decline of organized labor, the erosion of the minimum wage, the shift from a manufacturing-based to a service-based economy, the transformation to a more globalized economy, and the lack of a progressive income tax. Except for the rise of globalization, the rest of these reasons are grounded in policy choices made over the past 30 years. They can be reversed.

We can strengthen our unions and the American working family by passing the Employee Free Choice Act, we can raise the minimum wage to $10.00 an hour, we can choose to have an industrial policy that encourages the manufacturing sector and we can return to the progressive tax structure that once governed this country. 

James K. Galbraith, the noted economist at the University of Texas, has noted that "inequality produces unemployment while unemployment produces inequality." Policies that reduce inequality also reduce unemployment. Thus the Administration should concentrate on reversing the Bush tax cuts for the top decile and on passing the Employee Free Choice Act that will strengthen unions. But the President must speak forcefully and with conviction on the topic of economic inequality. Harry Truman once said, "A society will be judged by how it treats its weakest members." The President must stand up for the poor here and now because if the GOP returns to power, it's not a double dip recession that awaits us but a full blown depression. Because depressions are the natural outcome of Republican policies that favor the wealthy.

 

 

Tags: US Economy, Obama Administration, US History, Ronald Reagan, Employee Free Choice Act (all tags)

Comments

8 Comments

The President and the Democratic party had been pusillanimous while dealing with Republican party.

Republicans had been good in framing the parameters of the debates.  While talking about the small businesses, he merely said  "So I ask Senate Republicans to drop the blockade." That's weak. It should been Senate Republicans are responsible for blocking funding and availability of credit lines to small businesses. Obama and the Democrats needs to take the fight to the Republicans and teabaggers if they want the folks back home to be able to figure where the problems actually lie.

by louisprandtl 2010-08-31 08:30AM | 0 recs
As long as Axelrod is on the team

You will get speeches like this. Or maybe the President himself does not like confrontations, who knows? But when faced with near obliteration of historic majorities in both the House and Senate (which this administration mismanaged terribly), we get this speech: half-hearted, reluctant to put the blame where it is due and even more reluctant to throw a punch. This is what happens when you follow bipartisanship as a policy.

by tarheel74 2010-08-31 09:16AM | 0 recs
Your idea is a complete non-starter

The fact that Dems are suffering so badly in the polls (yesterday's Gallup generic poll, 51-41%) would suggest that voters are not buying into the Obama strategy of blaming everything on George W. Bush.

Given that, how do you honestly think they would react to Barack Obama trying to blame our current economic woes on President Ronald Reagan.....a beloved President who left office almost a quarter century ago? Most people remember him as the President who restored our economy (remember 18% interest rates, and 13% inflation???) and made people believe in America again.

With all due respect, Charles, there is not a political strategist alive who would advise the Dems to "pin this mess on the GOP going back to Reagan". That just doesn't make good sense, and it would make Obama look like more of a wuss than he already does.

Among other things, Obama has to at least TRY to look Presidential. The imagery of the past month has not been helpful: just a few days ago, he was riding a girl's mountain bike with a goofy looking helmet, and then days later he was down in the Gulf "buying him some shrimp". This man is essentially the country's CEO---he should try to at least act the part. 

 

by BJJ Fighter 2010-08-31 11:10AM | 0 recs
The problem

The problem is, Obama can give a campaign speech, but not a Presidential one, because as a President he is terribly inadeqaute and in over his head. I know the type well. I can thin of a Director I once worked for. He was a great pitchman, a great orator, but when it came down to making decisions, knowing what to do and being decisive, he never could. He just didnt have the experience or the edge so to speak necessary to serve in the high level position of authority he held. The end result was, he was let go, a year and a half after he was hired.

Obama is no different. He had no real world experience, no strong financial, foreign affairs or management background. He was a young inexperienced Senator who rose to the top on polish alone. The American public sees that now, which is why his approval is falling, why folks who voted for him wont do so again. The Democratic party was duped and misled by a smooth talker, instead of going with someone who actually had real experience and expertise.

by BuckeyeBlogger 2010-08-31 09:08PM | 1 recs
RE: The President on the Economy

Actually, I think the problem is too many know-it-all bloggers seem to have everything figures out and that this President is soem kind of a) either head-in-toe-clouds dreamer, or  b) a clueless intellectual, or c) just plain dumb.
I'm starting to think of the liberal blogosphere as a phone-in sports talk show where all the "Fans" pile on the home team (especially with all the calls to "Fire (fill in the blank with name of Blog Bircher Bogeyman)."
Since you people are such greaty geniuses and such invincible campaign strategists, why don't you go to Washington and offer to trade places with the President. I'm sure that after you're done, there will be unlimited peace and prosperity with progressive Democrats in every elected office.
Go ahead. You're as good at politics as you are coaching sports teams from your perch 16 rows back.

by spirowasright 2010-08-31 09:49PM | 0 recs
RE: The President on the Economy

there are plenty of "liberal bloggers" who have articulated detailed, thought-out reasons that they are upset with Obama.

it must feel nice to be able to just dismiss viewpoints you don't like with a wave of the hand and a sports-fan analogy.

by jeopardy 2010-08-31 10:32PM | 0 recs
RE: The President on the Economy

You're right about the thought behind some of the Obama criticisms from the left, but it still sounds too much to me like some nasally-voiced geek yelling at the coach from the cheap seats and hen calling the local "Talk About Sports" show every night to bellyache.
I didn't mean to insult your intelligence, but if the lip fits, wear it.

 

In other words, "WHy not? It's the truth!"

 

BAN KENT!

One more time--

BAN KENT!

by spirowasright 2010-09-01 01:01PM | 0 recs
I think it was a wise statement

I've been critical of Obama but I think this was an excellent statement.  He does call the Repubs out for obstructionism and for being motivated by partisan politics above the public interest.  To go further than he did would not sound presidential and might force the few possibly cooperative Republicans into caucus loyalty.

 

Reagan was a disaster--just consider what his administration did to the deficit and debt--but many Americans don't think so or don't care.  The focus needs to be on the past ten years, which indicts Bush and the Republicans in Congress.

 

Most of the dynamics of the economy are beyond the reach of the president.  In this sense, presidents are like rainmakers--they do something, and if the economy improves in some measurable way, they get credit.  But correlation does not establish causation.   Still, Obama's proposals make sense and they are succinct enough to give the media a focus for questioning Republican obstruction.

by Thaddeus 2010-08-31 09:55PM | 0 recs

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