Obama Speaks

I am watching Obama's press conference and typing this as he speaks. Here is my take:

1. He definitely gets that our economy sucks wind and we are in dire straights.
2. The fact that he is focusing on spending on alternative energy, health care, infrastructure, education and similar spending that creates jobs sounds good to me. This is versus tax breaks, which he is against, and I agree. Sure I would like a check in the mail. I just know I will need to send a bigger check later to pay it off. While I like what he is saying here, I do not think this will fix the problem, just that spending the money on these causes will be much better than pouring our money down the drain. And through job support it will help to ease the pain while we wait for the economy to finish its correction, which it will do on its own if we let it.
3. He notes that no one aspect of the plan will necessarily work (he has that right) but that we need to act. Since his recommend plan is supporting things that make some sense, I agree. We simply need to control the fallout. Damage control.
4. Now it is question and answer time. First question relates to number 1, i.e. he is calling it like it is. Are you making the problem worse by calling it so bad? Well, he is right, we cannot stick our heads in the sand. He is right we are going through the worst economic crisis since the Great Depression. We need to recognize the problem and that we can get out of this, but getting out of it first requires a recognition where we are. Moreover, Obama needs credibility here and he is saying the right things to gain it.
5. He is right that we need to avoid a downward spiral. There are some needed fixes in terms of valid businesses that need credit and deserve credit getting credit. This does not mean I think the way to do that is to prop up failed financial institutions, hoping they lend again. Unfortunately we have to wait for Geitner to tell us tomorrow how he will get credit flowing again. From what little Obama is saying, this part sounds the worst of what he has said so far. It sounds like we will still rely on the big financial institutions here, with some prodding to do the right thing.
6. A foreign relations question on Iran and nukes. He knows the buzz words but the jury has to be out on what he does here in the long term. Honestly, job one for pretty much all this year (and hopefully only this year) will be our economy, so he will have less time to spend on Iran and nuclear issues. Can't be ignored but second or third fiddle at the moment.
7. A question on whether the plan has bipartisan support, which so far based on the vote it does not. Right now he notes that is politics as usual, but he did the unprecedented move of putting three Republicans in his Cabinet. He does do a good job noting that he cannot focus on politics; he has to focus on helping out American families, though he hopes to work with Republicans. "My bottom line is, are we creating four million jobs." That he says is his top priority. To be clear he said earlier it is to create "or preserve" four million jobs. Nice goal, but how do you judge success?
8. He is lamenting now on our inefficient health care system and he is right. We spend more than any other country and still have health care that is no better than and perhaps worse than a number of advanced countries with much more reasonable costs.
9. A good question on consumer spending getting us into this mess. Obama dodges a bit pointing the blame at financial institutions but admits consumers spent too much on debt and that cannot continue. Yet he still thinks job one is to continue some spending through stimulus to stabilize the economy first. Then the government and individuals can deal with their debt load and prudently reduce it. My take is that he wants to create a new bubble through stimulus to stabilize the economy. We then need to slowly let the air out of that bubble in a way that does not destroy the economy, i.e. pop the bubble. Admirable goal, but in my book not possible. We need to let the current bubble deflate completely, control the fallout, pay down debt at individual levels and then rebuild from the wreckage. It will be painful, but it leads to a productive survival of the fittest on the business front.
10. The four million jobs thing is his key piece and the one I like most. We need a trickle up recovery. So long as the spending gives us some public benefit, which is where he is focusing, then it is a logical way to control the pain. I just do not believe you can get this many jobs out of the categories on which he focuses.
11. Stabilizing housing prices is another goal. This is fool's gold. They will bottom and the bottom will likely overshoot true value to the downside. Trying to stop this is a waste of money. It has happened numerous times before and will again. Helping people who lost their homes find affordable rental housing is key here, and the rental market seems to have a lot of room for more tenants, so the newly homeless just need support to afford it.
12. A question on Iraq. He dodges a bit. Not too surprising as I am sure there are things he was not told until he took the office.
13. Next bank bailout question and what strings we will tie. He is trying to avoid preempting Geitner on the big news. Is credit flowing to those needing it, who can and do provide jobs. Details for Tim to say tomorrow.
14. A question on Joe Biden saying we have a 30% chance of failure if we do everything right. Obama does not recall what they were discussing but admits not everything will work. Not everyone agrees on the answers. They are working various fronts at the same time and hopefully most will work.
15. Alex Rodriguez's admission that he used steroids when with the Texas Rangers. Depressing news and not good for the kids who look up to atheletes. Obvious answer. He goes on to note a better answer that losing your integrity is not worth it.
16. As a side note, he looks like he has glitter on his eyelids. And he is blinking a lot, which is a sign he is either nervous or not telling the truth. I say the former. Can you imagine the pressure this guy is under right now. You could not pay me enough.
17. Very few economists suggesting we do not need a "recovery" or "stimulus" package. My comment, of course I am not one (economist), but think about how many economists saw this mess coming.

Just my write-up on his first big televised event as President.

Disclosures: None.