Tuesday, November 25, 2008

Fast Times in a Slow Economy

Things are happening fast, as Monday saw not only P-E Obama's press conference introducing four members of his economic team, but a statement by President Bush and current Treasury Sec Paulsen emphasizing coordination on the economy between the incoming and outgoing administrations.

Obama holds another press conference Tuesday--a few hours from now--but I haven't seen speculation on whether he'll be announcing more appointments. Maybe his budget director, who wasn't there Monday?

The impression left by the press conference Monday, especially combined with Obama's radio/YouTube address Saturday and his transition team's public statements Sunday, is that Obama saw a dangerous void and is moving quickly to fill it. The Times of London saw it that way: Barack Obama effectively took control of the US economy - two months before he takes office - by declaring that his plan to confront the financial crisis "starts today". As he unveiled his new economic team, Mr Obama struck a very different note from the diffident election winner of three weeks ago who stressed that America is led by only "one president at a time". Today, he appeared fully aware that the US and global markets are looking to him, not President Bush, for solutions to the deepening crisis.

The U.S. stock market responded with the largest two day gains in decades, and Asian markets were following the upward movement this morning. Obama's choices also got pretty strong reviews.

What I found fascinating were some of the things Obama said about his appointees as he introduced them--things that aren't usually part of their media descriptions. For instance...

On Timothy Geithner, Secretary of the Treasury: “Growing up partly in Africa and having lived and worked throughout Asia; having served as Under Secretary of the Treasury for International Affairs – one of many roles in the international arena; and having studied both Chinese and Japanese, Tim understands the language of today’s international markets in more ways than one.”

On Larry Summers, director of the National Economic Council : “As a thought leader, Larry has urged us to confront the problems of income inequality and the middle class squeeze, consistently arguing that the key to a strong economy is a strong and growing middle class. This idea is the core of my own economic philosophy and will be the foundation for all of my economic policies.”

On Christina Romer, director of the Council of Economic Advisors, usually described simply as an expert on the Great Depression. Obama added that she's also an expert on the subsequent economic expansion. “Christina has also done groundbreaking research on many of the topics our Administration will confront – from tax policy to fighting recessions. And her clear-eyed, independent analyses have received praise from both conservative and liberal thinkers alike. I look forward to her wise counsel in the White House.”

As Domestic Policy Advisor, Melody Barnes will be “working hand-in-hand with my economic policy team to chart a course to economic recovery. An integral part of that course will be health care reform – and she will work closely with my Secretary of Health and Human Services on that issue...As executive vice president for policy at the Center for American Progress, Melody directed a network of policy experts dedicated to finding solutions for struggling middle class families."

Obama spoke of the economic stimulus plan: “I think the most important thing to recognize is that we have a consensus, which is pretty rare, between conservative economists and liberal economists, that we need a big stimulus package that will jolt the economy back into shape and that is focused on the 2.5 million jobs that I intend to create during the first part of my administration,” he said. “We have to put people back to work. Now, that runs in parallel with making sure that our financial system is stable. And so we're going to have to do more than one thing at a time. But across the board, people believe that this stimulus is critical.”

He wants this package ready to go ASAP. That probably means his team gets it together by early December, Congress perhaps holds hearings in another lame duck session, but the new Congress definitely begins working on it in early January. He wouldn't want them to actually pass it and send it to the White House until he's been inaugurated--because there will still be another president there-- but soon after.

Also on tap for Tuesday, according to Reuters: U.S. Treasury Secretary Henry Paulson plans to announce on Tuesday the formation of a program to increase the availability of auto loans, student loans and credit cards, the Wall Street Journal reported, citing people familiar with the matter.

Fast times in a slow economy--with Black Friday looming--the now-ominous name of the traditional biggest shopping day of the biggest shopping period of the year: the day that the malls used to love, and this year everyone fears.

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