Tuesday, January 27, 2009

Legacy Woes

He's been in office one whole week, and already Barack Obama is worried about his legacy:

PRESIDENT Barack Obama told Republicans behind closed doors that he worried about the soaring US debt because "I will be judged by the legacy I leave behind" on the economy, a source said.

Wooing lawmakers openly hostile to his stimulus plan, Mr Obama also warned that the current recession was "different, deeper, and global,'' and that inaction could cause "irreparable'' economic damage, said a Republican participant.

But "nobody is more worried about the deficit and the debt than me,'' he told Republicans who charge the $US825 billion (1.2 trillion) stimulus plan is far too large and packs far too little economic punch, the source said.

"I will be judged by the legacy I have left behind. I don't want to leave our children with a legacy of debt. I am inheriting an annual yearly debt of over $US1 trillion,'' the official quoted Mr Obama as saying.

Is it just me, or is President Obama's concern about his legacy a little out of place?

In better stimulus package news, it looks like the contraceptives are out:

NBC News confirms that the president called Henry Waxman, the chairman of the committee that inserted the contraception provision into the stimulus during the mark up last week, to ask him to remove the measure from the bill, according to a Democratic leadership source.

In short, the idea has simply become too controversial. Speaker Nancy Pelosi's defense of the program over the weekend, where she indicated that it would be a money saver, was not well received.

So that provision is out.

Good thing; otherwise, Nancy might have had to get used to unflattering comparisons between herself and one E. Scrooge, whose quote about the poor is well known:

"If they would rather die," said Scrooge, "they had better do it, and decrease the surplus population." [Charles Dickens, A Christmas Carol]

Nancy Pelosi went one better, though, by insisting that the poor could save the economy by failing to be conceived in the first place. What kind of savvy Democrat tells her poverty-stricken constituents that the best way for them to help the economy is to stop having children?

Republicans are continuing to raise concerns about the stimulus package:

Jan. 27 (Bloomberg) -- President Barack Obama said Republicans and Democrats should put politics aside to meet the urgent need for an economic stimulus, and he promised to address financial regulations and keeping the banking system stable.

“The statistics every day underscore the urgency of the economic situation,” Obama said after meeting with House Republicans, and before a session with their Senate counterparts. “The key right now is to make sure that we keep politics to a minimum.”

Obama made an unusual pilgrimage to the U.S. Capitol to talk with Republican lawmakers amid signs they are stepping up resistance to his economic stimulus plan over spending amounts and the size of tax cuts. Several Republican lawmakers said afterward that the president didn’t overcome their objections to the legislation as drafted by House Democrats.

“While the president was genial, his proposal remains rooted in a liberal, big-government ideology that ignores history,” said Representative Tom Price, a Georgia Republican.

On the one hand, I can't help but think "put politics aside" is code for "get used to doing whatever the Dems want." On the other, though, I fail to see how larger tax cuts are going to stimulate the economy at this point, since they don't address many of the root causes of the economic downturn.

Speaking of root causes, Obama will also be meeting with corporate CEOs to seek their backing of the stimulus plan:

After their chat, Obama will deliver remarks on the bill in the East Room but will not take reporters’ questions, according to press secretary Robert Gibbs.

While the president has not sat down with American reporters since moving into the White House, he gave his first TV interview to Al-Arabiya, a Dubai-based satellite news channel. Mr. Obama spoke as his envoy to the Middle East, George Mitchell, arrived in Egypt on the first stop of a trip that also will take him to Israel, the West Bank, Jordan, Turkey, and Saudi Arabia. Mr. Gibbs said Obama’s interview, which aired Tuesday, was an “opportunity to show the world he would be personally involved and engaged in seeking peace in the Middle East.”

The CEOs who visit Wednesday are likely to tell the president about hard times – and resulting layoffs – at their companies amid the economic downturn. The meeting with the titans of industry follows Obama’s trip Tuesday to Capitol Hill to meet with Republicans in the House and Senate to seek their support of the American Recovery and Reinvestment Act.

CEOs with multi-million dollar net worths telling the president how hard things are, while President Obama asks for their support of his stimulus plan. Hmmm. That would be a good time to be a fly on the wall.

Meanwhile, in the real world, as people are suffering real hardships from the loss of good jobs and even their homes, all of this means little. We've already had a $400 billion bailout; Obama's is more than twice that size, yet there are no guarantees that the people most in need of help will ever get it. Time will tell whether these bailouts will add up to enough to pull Americans back from the brink of a Depression, or whether they are too much-- but too late.

Maybe Obama's right to be worried about his legacy, after all.

1 comment:

Anonymous said...

On the other, though, I fail to see how larger tax cuts are going to stimulate the economy at this point, since they don't address many of the root causes of the economic downturn.

Read some of the analysis over at Greg Mankiw's blog. The rationale for tax cuts over gov't spending is manifold, including empirical estimates of the multiplier effects of both types of stimulus, the shorter lag time of tax cuts vs. spending projects, etc.