Update II: Obama: ‘You Have Some People … Who Philosophically Think Government Has No Business Interfering In The Marketplace’

Fancy that! Reports CNN:

“President Obama is holding the first evening press conference of his presidency Monday, with the financial crisis as the main topic. Before taking questions, he is giving a brief speech. Here is a running transcript of the speech and news conference:

President Obama says creating 4 million jobs is the most important part of his economic plan.”

[My initial, quick comments are interspersed below, in bold. More comments to follow.]

President Obama: Good evening, everybody. Please be seated.

Before I take your questions tonight, I’d like to speak briefly about the state of our economy and why I believe we need to put this recovery plan in motion as soon as possible.

I took a trip to Elkhart, Indiana, today. Elkhart is a place that has lost jobs faster than anywhere else in America. In one year, the unemployment rate went from 4.7 percent to 15.3 percent. Companies that have sustained this community for years are shedding jobs at an alarming speed, and the people who’ve lost them have no idea what to do or who to turn to.

They can’t pay their bills. They’ve stopped spending money. And because they’ve stopped spending money, more businesses have been forced to lay off more workers. [So what came first, Mr. President? Job loss or a cessation of spending? Do you even know?] In fact, local TV stations have started running public service announcements to tell people where to find food banks, even as the food banks don’t have enough to meet the demand.

As we speak, similar scenes are playing out in cities and towns across America. Last Monday, more than 1,000 men and women stood in line for 35 firefighter jobs in Miami. Last month, our economy lost 598,000 jobs, which is nearly the equivalent of losing every single job in the state of Maine.

And if there’s anyone out there who still doesn’t believe this constitutes a full-blown crisis, I suggest speaking to one of the millions of Americans whose lives have been turned upside-down because they don’t know where their next paycheck is coming from.

And that is why the single most important part of this economic recovery and reinvestment plan is the fact that it will save or create up to 4 million jobs, because that’s what America needs most right now.

It is absolutely true that we can’t depend on government alone to create jobs or economic growth. That is and must be the role of the private sector. But at this particular moment, with the private sector so weakened by this recession, the federal government is the only entity left with the resources to jolt our economy back into life. [So these are centrally planned, make-work ploys, which the market would not create or sustain sans government.]

It is only government that can break the vicious cycle, where lost jobs lead to people spending less money, which leads to even more layoffs. And breaking that cycle is exactly what the plan that’s moving through Congress is designed to do.

When passed, this plan will ensure that Americans who’ve lost their jobs through no fault of their own can receive greater unemployment benefits and continue their health care coverage. [In other words, welfare. And what has assigning blame have to do with an economic downturn/depression? I see: everyone deserves a job, unless he has done something really bad. And since job loss is undeserved, people must be made whole. Now that’s socialism.]

We’ll also provide a $2,500 tax credit to folks who are struggling to pay the costs of their college tuition and $1,000 worth of badly needed tax relief to working- and middle-class families. [Does He understand what cutting taxes means? It means returning stolen property from whence it was taken in the first place] These steps will put more money in the pockets of those Americans who are most likely to spend it, and that will help break the cycle and get our economy moving. [And after they spend it?]

But as we’ve learned very clearly and conclusively over the last eight years, tax cuts alone can’t solve all of our economic problems, especially tax cuts that are targeted to the wealthiest few Americans. We have tried that strategy time and time again, and it’s only helped lead us to the crisis we face right now. [Bush did not only cut taxes; he increased spending many fold. Obama is providing tax rebates, not cuts, and increasing spending even more than Bush. Which makes him even worse than Bush.]

And that’s why we have come together around a plan that combines hundreds of billions in tax cuts for the middle class with direct investment in areas like health care, energy, education, and infrastructure, investments that will save jobs, create new jobs and new businesses, and help our economy grow again, now and in the future.

More than 90 percent of the jobs created by this plan will be in the private sector. [The government, not the market, conjures a scheme and puts people to work on it. Is that what He calls private sector employment?! Apparently so.] They’re not going to be make-work jobs, but jobs doing the work that America desperately needs done: jobs rebuilding our crumbling roads and bridges, repairing our dangerously deficient dams and levees so that we don’t face another Katrina.

They’ll be jobs building the wind turbines and solar panels and fuel-efficient cars that will lower our dependence on foreign oil and modernizing our costly health care system that will save us billions of dollars and countless lives.

They’ll be jobs creating the 21st-century classrooms, libraries, and labs for millions of children across America. And they’ll be the jobs of firefighters and teachers and police officers that would otherwise be eliminated if we do not provide states with some relief.

Now, after many weeks of debate and discussion, the plan that ultimately emerges from Congress must be big enough and bold enough to meet the size of the economic challenges that we face right now.

It’s a plan that is already supported by businesses representing almost every industry in America, by both the Chamber of Commerce and the AFL-CIO. It contains input, ideas and compromises from both Democrats and Republicans.

It 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.

Now, despite all of this, the plan’s not perfect. No plan is. I can’t tell you for sure that everything in this plan will work exactly as we hoped, but I can tell you with complete confidence that a failure to act will only deepen this crisis, as well as the pain felt by millions of Americans.

Now, my administration inherited a deficit of over $1 trillion, but because we also inherited the most profound economic emergency since the Great Depression, doing little or nothing at all will result in even greater deficits, even greater job loss, even greater loss of income, and even greater loss of confidence. [Government owns the deficit. Does Obama really mean to say here that if the government doesn’t increase its deficit and debt, worse deficits and debts will result? Apparently so.]

Those are deficits that could turn a crisis into a catastrophe, and I refuse to let that happen. As long as I hold this office, I will do whatever it takes to put this economy back on track and put this country back to work. [Obama is nothing if not careful; he must have worked out that whether the situation grows worse or improves, his crazy New New Deal and he will be excempt from blame.]

I want to thank the members of Congress who’ve worked so hard to move this plan forward, but I also want to urge all members of Congress to act without delay in the coming week to resolve their differences and pass this plan.

We find ourselves in a rare moment where the citizens of our country and all countries are watching and waiting for us to lead. It’s a responsibility that this generation did not ask for, but one that we must accept for the future of our children and our grandchildren.

The strongest democracies flourish from frequent and lively debate, but they endure when people of every background and belief find a way to set aside smaller differences in service of a greater purpose. That’s the test facing the United States of America in this winter of our hardship, and it is our duty as leaders and citizens to stay true to that purpose in the weeks and months ahead.

After a day of speaking with and listening to the fundamentally decent men and women [fundamentally? You mean other than their odd, clingy habits–you know, to guns and God.] who call this nation home, I have full faith and confidence that we can do it, but we’re going to have to work together. That’s what I intend to promote in the weeks and days ahead.

And with that, I’ll take some of your questions.

And let me go to Jennifer Loven at A.P. There you go.

Question: Thank you, Mr. President. Earlier today in Indiana, you said something striking. You said that this nation could end up in a crisis without action that we would be unable to reverse.

Can you talk about what you know or what you’re hearing that would lead you to say that our recession might be permanent when others in our history have not? And do you think that you risk losing some credibility or even talking down the economy by using dire language like that?

Obama: No, no, no, no. I think that what I’ve said is what other economists have said across the political spectrum, which is that, if you delay acting on an economy of this severity, then you potentially create a negative spiral that becomes much more difficult for us to get out of. [Not these economists–200 of them]

We saw this happen in 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. [The Japanese had indeed tried Obama’s plan. As Ann Coulter quipped, if the Japanese, whom Charles Murray has shown to have higher IQs, failed to pull it off, we have no hope in hell of surviving such a socialization of the economy.]

So what I’m trying to underscore is what the people in Elkhart already understand, that this is not your ordinary, run-of-the-mill recession. We are going through the worst economic crisis since the Great Depression.

We’ve lost now 3.6 million jobs, but what’s perhaps even more disturbing is that almost half of that job loss has taken place over the last three months, which means that the problems are accelerating instead of getting better. [The set back: Bush’s bailout bonanza.]

Now, what I said in Elkhart today is what I repeat this evening, which is, I’m absolutely confident that we can solve this problem, but it’s going to require us to take some significant, important steps.

Step number one: We have to pass an economic recovery and reinvestment plan. And we’ve made progress. There was a vote this evening that moved the process forward in the Senate. We already have a House bill that’s passed. I’m hoping, over the next several days, that the House and the Senate can reconcile their differences and get that bill on my desk.

There have been criticisms from a bunch of different directions about this bill, so let me just address a few of them.

Some of the criticisms really are with the basic idea that government should intervene at all in this moment of crisis. Now, you have some people, very sincere, who philosophically just think the government has no business interfering in the marketplace. And, in fact, there are several who’ve suggested that FDR was wrong to interfere back in the New Deal. They’re fighting battles that I thought were resolved a pretty long time ago.

Most economists almost unanimously recognize that, even if philosophically you’re — you’re wary of government intervening in the economy, when you have the kind of problem we have right now — what started on Wall Street, goes to Main Street, suddenly businesses can’t get credit, they start paring back their investment, they start laying off workers, workers start pulling back in terms of spending — that, when you have that situation, that government is an important element of introducing some additional demand into the economy.

We stand to lose about $1 trillion worth of demand this year and another trillion next year. And what that means is you’ve got this gaping hole in the economy. [Assignment: read “FALLING PRICES ARE NOT DEFLATION BUT THE ANTIDOTE TO DEFLATION” By George Reisman, to understand the “demand” thing.]

That’s why the figure that we initially came up with of approximately $800 billion was put forward. That wasn’t just some random number that I plucked out of — out of a hat. That was Republican and Democratic, conservative and liberal economists that I spoke to who indicated that, given the magnitude of the crisis and the fact that it’s happening worldwide, it’s important for us to have a bill of sufficient size and scope that we can save or create 4 million jobs.

That still means that you’re going to have some net job loss, but at least we can start slowing the trend and moving it in the right direction.

Now, the recovery and reinvestment package is not the only thing we have to do. It’s one leg of the stool. We are still going to have to make sure that we are attracting private capital, get the credit markets flowing again, because that’s the lifeblood of the economy.

And so tomorrow my treasury secretary, Tim Geithner, will be announcing some very clear and specific plans for how we are going to start loosening up credit once again.

And that means having some transparency and oversight in the system. It means that we correct some of the mistakes with TARP that were made earlier, the lack of consistency, the lack of clarity, in terms of how the program was going to move forward.

It means that we condition taxpayer dollars that are being provided to banks on them showing some restraint when it comes to executive compensation, not using the money to charter corporate jets when they’re not necessary.

It means that we focus on housing and how are we going to help homeowners that are suffering foreclosure or homeowners who are still making their mortgage payments, but are seeing their property values decline. [So now an owner has a property title in the perceived value of the property. News flash to Big Ears: A property is worth what the market will pay for it at the time of the sale; no more, no less.]

So there are going to be a whole range of approaches that we have to take for dealing with the economy.

…

Chuck Todd. Where’s Chuck?

Question: Thank you, Mr. President. In your opening remarks, you talked about that, if your plan works the way you want it to work, it’s going to increase consumer spending. But isn’t consumer spending, or overspending, how we got into this mess? And if people get money back into their pockets, do you not want them saving it or paying down debt first before they start spending money into the economy?

Obama: 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 one dollar’s worth of assets and they were betting thirty dollars on that one dollar, what we had was a crisis in the financial system.

That led to a contraction of credit, which, in turn, meant businesses couldn’t make payroll or make inventories, which meant that everybody became uncertain about the future of the economy, so people started making decisions accordingly, reducing investment, initiating layoffs, which, in turn, made things worse.

Now, you are making a legitimate point, Chuck, about the fact that our savings rate has declined and this economy has been driven by consumer spending for a very long time. And that’s not going to be sustainable.

You know, if — if all we’re doing is spending and we’re not making things, then over time other countries are going to get tired of lending us money and eventually the party’s going to be over. Well, in fact, the party now is over.

And so the — the sequence of how we’re approaching this is as follows. Our immediate job is to stop the downward spiral, and that means putting money into consumer’s pockets. It means loosening up credit. [But loose credit contributed to the crisis.]

It means putting forward investments that not only employ people immediately, but also lay the groundwork for long-term economic growth.

And — and that, by the way, is important, even if you’re a fiscal conservative, because the biggest problem we’re going to have with our federal budget is if we continue a situation in which there are no tax revenues because economic growth is plummeting at the same time as we’ve got more demands for unemployment insurance, we’ve got more demands for people who have lost their health care, more demand for food stamps. That will put enormous strains on the federal budget, as well as the state budget.

So the most important thing we can do for our budget crisis right now is to make sure that the economy doesn’t continue to tank. And that’s why passing the economic recovery plan is the right thing to do, even though I recognize that it’s expensive.

Look, I — I would love not to have to spend money right now. I’d love — you know, this notion that somehow I came in here just ginned up to spend $800 billion, you know, I mean, that wasn’t — that wasn’t — that wasn’t how I envisioned my presidency beginning. But we have to adapt to existing circumstances.

Now, what we are going to also have to do is to make sure that, as soon as the economy stabilizes, investment begins again, we’re no longer contracting but we’re growing, that our mid-term and long-term budget is dealt with, and I think the same is true for individual consumers. [The market, however crippled, doesn’t allow individuals to sell others into financial slavery; that’s a feature of the state.]

Right now, they’re — they’re just trying to figure out, how do I make sure that, if I lose my job, you know, I’m still going to be able to make my mortgage payments? Or they’re worried about, how am I going to pay next month’s bills? So they’re not engaging in a lot of long-term financial planning. [Like their government?]

Once the economy stabilizes and people are less fearful, then I do think that we’re going to have to start thinking about, how do we operate more prudently? Because there’s no such thing as a free lunch.

So if — if you want to get — if you want to buy a house, then putting zero down and buying a house that is probably not affordable for you in case something goes wrong, that’s something that has to be reconsidered. So we’re going to have to change our — our bad habits. [Mañana. First we must spend ourselves out of debt. If it sounds insane it’s b/c it is.]

But right now, the key is making sure that we pull ourselves out of the economic slump that we’re in.

All right, Julianna Goldman, Bloomberg?

Question: Thank you, Mr. President. Many experts, from Nouriel Roubini to Sen. [Chuck] Schumer [D-New York], [In what is he an expert? Parasitism?] have said that it will cost the government more than $1 trillion to really fix the financial system. During the campaign, you promised the American people that you won’t just tell them what they want to hear, but what they need to hear.

Won’t the government need far more than the $350 billion that’s remaining in the financial rescue funds to really solve the credit crisis?

Obama: Well, the credit crisis is real, and it’s not over. We averted catastrophe by passing the TARP legislation. [Did you not say that matters have gotten worse over the last 3 months?] But, as I said before, because of a lack of clarity and consistency in how it was applied, a lack of oversight in — in how the money went out, we didn’t get as big of a bang for the buck as we should have. [So a better bureaucracy would have improved the abysmal the outcome.]

My immediate task is making sure that the second half of that money, $350 billion, is spent properly. That’s my first job. Before I even think about what else I’ve got to do, my first task is to make sure that my secretary of the treasury, Tim Geithner, working with Larry Summers, my national economic adviser, and others are coming up with the best possible plan to use this money wisely in a way that’s transparent, in a way that provides clear oversight, that we are conditioning any money that we give to banks on them reducing executive compensation to reasonable levels and to make sure that they’re not wasting that money.

We are going to have to work with the banks in an effective way to clean up their balance sheets so that some trust is restored within the marketplace, because right now part of the problem is that nobody really knows what’s on the bank’s books. Any given bank, they’re not sure what kinds of losses are there. We’ve got to open things up and restore some trust.
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We also have to deal with the housing issue in a clear and consistent way.

I don’t want to pre-empt my secretary of the treasury. He’s going to be laying out these principles in great detail tomorrow.