George Rebane

President Obama started his first White House press conference last night in classic style.  His opening remarks were delivered flawlessly with the Presidential Style knob turned up to ‘Extreme’ – I was impressed.  What he said was highly debatable, but how he said it was definitely not.  This guy is good.

But then something happened when the teleprompters were turned off.  The sonorous voice was still there, but now it came out hesitatingly with all the ‘aahs’, ‘ers’, and ‘uhs’ that the rest of us use when we have trouble thinking faster than our mouth can speak.  And then his eyes lost the piercing authoritative glint that had just been sweeping the room full of reporters like a tracking radar.  Now they reverted to a more tired and withdrawn look, deeper in their sockets, closer to the brain that was supposed to produce the answers.  The eyes told of the hectic schedule he has been maintaining trying to comprehend, convince, cajole on issues that are new to both him and Congress.

The main insight that the President wanted us to understand was that ‘We have to do something.  Doing nothing is not an option.’  This he said was non-negotiable.  And for him and his fellow travelers it was clear that, if the government didn’t do “something”, then the rest of us in the country would just stop in our tracks, lie down, roll over, and become comatose.  In that mindset everything positive and progressive issues from and returns to the government.  The great enterprises of this nation are just passive, directionless pachyderms, incapable of doing “something”, and that must be goaded and prodded onto the right path and kept going under a watchful eye.

During the Q&A the new President seemed to be afraid of having to answer too many questions, so he quickly took every answer on a long journey that wandered away from what was asked and didn’t return until all had forgotten the question.  In spite of these sojourns, I was left with the distinct impression that no one, starting with Bernanke all the way to the congressional Sergeant-at-Arms, had a clue what the country’s economic machinery was really doing, and what would be required for government to set it right.  Obama’s job was to display leadership and keep a straight face while all this is going on.

We learned from our President that –

• Tax cuts don’t work, printing more money does;
• The government will now provide federal dollars to pay for state jobs;
• The stimulus will contain “not a single earmark”, only billions and billions of dollars worth of projects formerly called earmarks;
• He does not understand that employment is a lagging economic indicator;
• He attributes “the problem” to the “failed policies of the past eight years” that cannot inform or advise the present;
• He believes that “partisanship is a bad habit”, apparently ignorant of its long and productive role in the governance of a deliberative republic;
• His “main bottom line” is to create four million new jobs by taking money from the private sector and dispensing it through that ever-efficient, timely, and properly targeted public pipeline;
• He does not understand that the private sector wants the feds to quit milling around and define a credible game plan so that we can all start placing our bets again – aka making investments.

And finally, when the CBS correspondent asked him the one substantive question of the entire session – ‘how will you/we know whether we are doing well?’ (actually, he inquired about what metrics the government would use to measure progress) – our President did his best imitation yet of a deer in the headlights.  It was clear from his muddled and evasive response that the question had never even come up in his meetings with the mavens.  He simply did not know, because they had never considered what in professional planning circles is known as a utility function – something that can be calculated from available data that allows the quantitative measurement of progress.

In the end it was clear that both the Congress and the administration were just going to wing it with political jawboning, while waiting to see what would really happen when they loosen the multi-trillion dollar drizzle across the country over the next two years.  (Oh yes, don’t even think about this stimulus stopping at around $800B, self-stimulation is a hard habit to break.)  And all of this will be done in the proven Reaganesque manner of being able to disagree with half the country without being disagreeable.  Good job!

[update]  The markets spoke decisively today responding to last night’s performance, and today’s double header featuring Treasury Sec Geithner’s banking plan and the Senate’s passage of the Print Trillions bill.  The plunge in the world’s markets was due to the mavens giving every indication that they neither know what’s going on, much less what they should do about it.  Contrary to Obama’s send-off last night to Geithner – “He’s gonna do great!” – Geithner bombed, and is now stacked in the empty suit closet of this new administration.  Investors promptly sold off everything to those who demanded a much lower price for the risk and uncertainty that Washington promises to deliver.  Most leaped into Treasuries and gold which shot up over $21 per ounce and now sells for more than $915/oz.  More to come on that front as the Peters begin to understand that most of the so-called $283B of “tax cuts” are really welfare payments to the Pauls who pay no taxes to begin with.  And someone should shove the new Nobelist and talking head Paul Krugman’s butt into the administration’s breach, and have him start executing the Keynesian policy nonsense he’s been spewing in the nation’s media. 

Finishing on an almost brighter note, Intel announced that it will take this opportunity, when everything is selling at a deep discount, to upgrade some of its US chip making plants in Arizona, New Mexico, and Oregon.  Notably absent, as reported here on RR, was the mention of any new investment in its home state of California – Arnold, call your office.  Meanwhile, the intrepid economic developers of our Nevada County are disregarding all this, and bravely marching forward with their plans to attract manufacturers to this remote mountain county in a business-dismal state that is now competing with Michigan (yes, dear Reader, MICHIGAN!) for the bottom of the nation’s business barrel.