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Irreversible Catastrophe Not as Bad As We Think   March 13th, 2009
Inconsistent message on economy an example of political expediency       

 
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It's a little hard to get a consistent grasp on what President Obama thinks of the economy. Depending on what's politically expedient, it's either on the verge of being an "irreversible catastrophe" or it's "not as bad as we think.

Recall a month or so ago when Obama was trying to get his stimulus package passed:

And if nothing is done, this recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.


He also said:

"A failure to act, and act now, will turn crisis into a catastrophe and guarantee a longer recession, a less robust recovery, and a more uncertain future," he [President Obama] said. "That's why I feel such a sense of urgency about the Economic Recovery and Reinvestment Plan."


But yesterday Obama said:

"I don't think things are ever as good as they say, or ever as bad as they say," he added. "Things two years ago were not as good as we thought because there were a lot of underlying weaknesses in the economy. They're not as bad as we think they are now."


Interesting that he didn't say that last month. Of course, they did pass the spending bill so Obama can claim that's why his position on the economy changed. But no significant amount of money authorized by the spending bill has actually been spent yet and the states are still trying to figure out how much money they'll get and where to spend it--so it's not like the anticipation of stimulus funds is making a serious impact in the economy at this point. Thus if things aren't as bad as they seem today, then things weren't as bad as they seemed last month when the president was fearmongering for passage of his bill and driving consumer confident into the ground.

I think, more than anything else, this is confirmation of my speculation last month that their push for the massive spending bill was an example of:

You never want a serious crisis to go to waste. And what I mean by that it's an opportunity to do things you think you couldn't do before.


It seems to me that Obama, in his attempt to change his negative message on the economy, has now come off looking inconsistent at best and confused at worse. It'll be interesting to see how the administration spins this in the future if/when they need another $500 billion for some new bailout plan and are forced to answer whether or not that particular crisis is really as bad as they think it is.

And, until and unless there's a good solution for the financial system, this may be Obama's "Mission Accomplished" moment.

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