This is just too rich, Obama administration blaming an irrational fear factor for driving down economy
Washington (AP) Irrational exuberance has given way to an "excess of fear." White House economic adviser Lawrence Summers blames a fearful public for dragging the economy into the gutter.
The director of the president's National Economic Council says "fear begets fear" and that "is the paradox at the heart of the financial crisis."
See my earlier op-ed here.
Here is a transcript of a talk that Obama gave in mid-February where he used the word "crisis" 24 times. During Obama's first press conference he talked about the crisis 12 times, including unprecedented crisis. In his first radio address, Obama claimed: "We begin this year and this Administration in the midst of an unprecedented crisis that calls for unprecedented action." On November 16th of last year Obama noted: "We’ve got an unprecedented crisis, or at least something that we have not seen since the Great Depression. " When Obama announced his economic team last November 24th, he said: "Well, I don’t want to look backwards. I think that — as I said, we’ve had an unprecedented crisis." The weird thing is that Summers was at the announcement of the economic team. During the Second Presidential debate, Obama said: "I think everybody knows now we are in the worst financial crisis since the Great Depression." in the first presidential debate, Obama said: "we are going through the worst financial crisis since the Great Depression." In the third debate: Obama said: "I think everybody understands at this point that we are experiencing the worst financial crisis since the Great Depression."
Equally, bizarre, was Obama's attack on McCain last September when McCain said that the "fundamentals of the economy are strong."
John McCain appeared to have scored a huge own goal when he described the US economy as 'fundamentally sound' after the financial collapses of 'Meltdown Monday'.
The Republican presidential candidate attempted to shake off the worldwide gloom following the bankruptcy of Lehman Brothers with an upbeat assessment.
As share prices tumbled, he said the 'fundamentals of the economy are strong'.
His rival Barack Obama immediately seized on the remark, saying it showed Mr McCain was out of touch with the realities of American life. . . . .
This is something from the beginning of an AP piece:
The economy is fundamentally sound despite the temporary "mess" it's in, the White House said Sunday in the kind of upbeat assessment that Barack Obama had mocked as a presidential candidate.
Obama's Democratic allies pleaded for patience with an administration hitting the two-month mark this week, while Republicans said the White House's plans ignore small business and the immediate need to fix what ails the economy. After weeks projecting a dismal outlook on the economy, administration officials - led by the president himself in recent days - swung their rhetoric toward optimism in what became Wall Street's best stretch since November.
During the fall campaign, Obama relentlessly criticized his Republican opponent, Sen. John McCain, for declaring, "The fundamentals of our economy are strong." Obama's team painted the veteran senator as out of touch and failing to grasp the challenges facing the country.
But on Sunday, that optimistic message came from economic adviser Christina Romer. When asked during an appearance on NBC's "Meet the Press" if the fundamentals of the economy were sound, she replied: "Of course they are sound."
"The fundamentals are sound in the sense that the American workers are sound, we have a good capital stock, we have good technology," she said. "We know that - that temporarily we're in a mess, right? We've seen huge job loss, we've seen very large falls in GDP. So certainly in the short run we're in a - in a bad situation."
Just a week ago, White House Office of Management and Budget director Peter Orszag declared that "fundamentally, the economy is weak." Days later, Obama told reporters he was confident in the economy.
"If we are keeping focused on all the fundamentally sound aspects of our economy, all the outstanding companies, workers, all the innovation and dynamism in this economy, then we're going to get through this," Obama said, striking a tone that his top aides mimicked.
Despite the new enthusiasm at the White House and on Wall Street, there was little solid evidence to suggest an end was in sight to the severe recession that has already cost 4 million American jobs, driven down home values and sent foreclosures soaring. Meanwhile, Chinese Premier Wen Jiabao said he was concerned about the safety of the estimated $1 trillion his country has invested in U.S. government debt.
Obama sought to downplay the worries.
"There's a reason why even in the midst of this economic crisis you've seen actual increases in investment flows here into the United States," Obama said Saturday in the Oval Office. "I think it's a recognition that the stability not only of our economic system, but also our political system, is extraordinary." . . . .