Tuesday, March 17, 2009
How the tables have turned. In September 2008, when GOP presidential nominee John McCain said "the fundamentals of our economy are strong," unemployment was 6.1 percent, the credit crunch had yet to reach the point that prompted President George W. Bush to propose a bailout, and Team Obama proclaimed that an out-of-touch McCain "just doesn't get it" on the economy.
Now with unemployment at 8.1 percent, the $700 billion-plus Bush bailout has been followed by the $787 billion Obama stimulus package, and some D.C. Democrats already are arguing for another stimulus package because the first Obama stimulus bill didn't do the trick. Yet top Obama economic adviser Christina Romer told "Meet the Press" on Sunday, "Of course, the fundamentals (of the U.S. economy) are sound in the sense that the American workers are sound, we have a good capital stock, we have good technology." (Those qualifying statements sound a lot like the McCain explanation for his positive diagnosis of the economy -- "that the workers of America are the fundamentals of the economy.")
President Obama himself said last week, "If we are keeping focused on all the fundamentally sound aspects of our economy ... then we're going to get through this."
If Obama is confident about the soundness of the U.S. economy, does that mean he "just doesn't get it?" No, it means that he is president. Now he has to pay the political price for incessant badmouthing of the U.S. economy. Now he has to prop up the very system at which he had been sniping for years.
And I do mean years. Of course Obama spent 2007 and 2008 talking down the economy -- he was running in a Democratic primary. But as far back as 2002, before he became a senator, Obama suggested that Bush was waging war against Saddam Hussein "to distract us from corporate scandals and a stock market that has just gone through the worst month since the Great Depression." Factually, Obama was incorrect. There had been four bigger one-month drops since the Depression -- but there was little downside to over-trashing the economy, albeit inaccurately, during the Bush years.
Now Obama owns the economy -- so the economy fear-mongering must end. As top White House economic adviser Larry Summers told the Brookings Institution, "We need to instill the trust that allows opportunity to overcome fear and enables families and businesses to again imagine a brighter future." In what he called "the central paradox of financial crisis," Summers observed "that while the problem was caused by excessive complacency and excessive optimism, what we need today is more optimism and more confidence."
That sounds like a column I wrote last September when I thought Democrats were being overly pessimistic about an economy that had been wounded by a government loan to AIG (then $85 billion), a $30 billion bailout in May for JP Morgan to buy Bear Stearns and the pricey shoring up of mortgage giants Fannie Mae and Freddie Mac. Clearly, I was wrong about looming damage of overly swapped bad credit and Wall Street panic.
Six months later, two Washington administrations have thrown another $2 trillion into the pit -- and some Democrats are arguing that more spending is needed to stimulate the economy.
On the one hand, I think Summers is right. Fear and panic are stalling an engine that still has plenty of kick left -- but it won't start purring until the public believes again.
Now that they're on the running-things side, Obama and company are learning that it's a lot easier to kick the economy than to jump start it. Too bad that they were a lot better at kicking it.
Rasmussen Reports is a media company specializing in the collection, publication and distribution of public opinion information.
We conduct public opinion polls on a variety of topics to inform our audience on events in the news and other topics of interest. To ensure editorial control and independence, we pay for the polls ourselves and generate revenue through the sale of subscriptions, sponsorships, and advertising. Nightly polling on politics, business and lifestyle topics provides the content to update the Rasmussen Reports web site many times each day. If it's in the news, it's in our polls. Additionally, the data drives a daily update newsletter and various media outlets across the country.
Some information, including the Rasmussen Reports daily Presidential Tracking Poll and commentaries are available for free to the general public. Subscriptions are available for $3.95 a month or 34.95 a year that provide subscribers with exclusive access to more than 20 stories per week on upcoming elections, consumer confidence, and issues that affect us all. For those who are really into the numbers, Platinum Members can review demographic crosstabs and a full history of our data.
To learn more about our methodology, click here.