10 February 2009

The First Press Conference

Last night, Pres. Obama gave his first press conference. While I give him credit for passion, I have three serious bones to pick with him... and a quibble.

1. The president said,
[The proposed "stimulus" plan] also contains an unprecedented level of transparency and accountability so that every American will be able to go online and see where and how we're spending every dime. What it does not contain, however, is a single pet project, not a single earmark, and it has been stripped of the projects members of both parties found most objectionable.
This is absurd. To claim that because a piece of legislation does not contain "earmarks" ("earmarking" being a particular procedure by which certain types of appropriations are attached to bills) that "it does not contain... a single pet project" is either a radical redefinition of legislative and watchdog terminology, or a demonstrably false statement.

2. (A quibble.) I do not care if he uses the word "policies" or "theories", the president and those who use his talking points have already used the phrase
"return to the failed theories of the last eight years that got us into this"
so often that it has become hackneyed and cliché. Please quit. Don't you pay speechwriters?

3. Speaking of failed theories and policies, the president invoked a little modern Japanese history:
[I]n Japan in the 1990s, where they did not act boldly and swiftly enough and, as a consequence, they suffered what was called the lost decade, where essentially, for the entire '90s, they did not see any significant economic growth.
Funny he should mention that, because the Wall Street Journal brought up the same bit of history on December 16, 2008. As a means of warning then President-elect Obama, they pointed out that between August 1992 and November 1999, the Japanese government pushed through no less than eight "stimulus" packages costing 118 trillion yen! That is about $1.3 trillion. the result?
Japan's economy grow anemically over that decade, but as the nearby chart shows, its national debt exploded. Only in this decade, with a monetary reflation and Prime Minister Junichiro Koizumi's decision to privatize state assets and force banks to acknowledge their bad debts, did the economy recover... But Japan does have better roads.
Oh boy.
4. The president also said, responding to a question about the current economic dilemma,

Well, first of all, I don't think it's accurate to say that consumer spending got us into this mess. What got us into this mess initially were banks taking exorbitant, wild risks with other people's monies based on shaky assets and because of the enormous leverage, where they had $1 worth of assets and they were betting $30 on that $1, what we had was a crisis in the financial system.
Mr. President, let's get real. The "exorbitant, wild risks" that the banks were taking were largely subprime mortgages, issued to consumers who were buying houses, who probably should not have been, but were given the mortgages under pressure from your political allies, marketed by Freddie and Fannie. Remember this hearing?

There were other bad assets, to be sure, but these started the ball rolling!

To say that this crisis "started on Wall Street, goes to Main Street" as you did last night, sir, leaves out the first step in the process: it started on Capitol Hill, went to Wall Street and then to Main Street.

There are other issues in this press conference, and I'm sure that others will fact check them more adequately than I.

No comments: