I jotted down some notes from the President’s news conference this evening – no great revelations, but some things that gave pause or were reassuring…
It’s clear that the jobs component of the stimulus package is priority number one. And the President said the creation of up to four million jobs would also be his first metric for determining whether the package was successful. The loss of jobs is obviously what troubles most people, not only from a personal standpoint, but from an economic one. Until jobs are restored, the rest of the economy will not pick up. There’s little debate about that.
But it was somewhat chilling to hear Mr. Obama’s reference to the “Lost Decade” of Japan in the 1990’s. Based on the history of the US economy, it’s hard to fathom a decade without growth. It’s getting easier to fathom, unfortunately, but we can only take comfort from the fact that the problems have been acknowledged at an earlier stage than in Japan and that action is being taken. Whether that action is the right or prudent course remains to be seen.
I thought Bloomberg’s Julianna Goldman asked a great question: “Won’t the government need far more than the $350 billion that’s remaining in the final rescue funds to really solve the credit crisis?” Ah,ha. The President answered: “Nobody really knows what’s on the banks’ books.” And I thought, hasn’t that been the case since last summer? Troubling.
He also said we won’t know if more money is needed until we see whether confidence is restored in the markets with this next wave. He conceded the government cannot replace the private capital that’s been lost. Yes, but what concerns me is – how far will the government be willing to go before truly pressuring the private sector to step up? The government has already waded in pretty deep. At some point, despite the proven shortcomings of the free market, we as taxpayers have to let go of the rope and hope the capitalist ship rights itself. Otherwise, the debt will surely be an albatross we cannot shake.
Let me know what stood out to you…
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