Change of Tone: Obama Administration Changes Rhetoric on Economy Again

While Peter Orzag, White House Office of Management and Budget director, just a week ago stated, "fundamentally, the economy is weak." Christina Romer, the head of the White House Council of Economic Advisers, said "the fundamentals of our economy are strong, but these are very, very difficult times."

President Obama met with Brazilian President Luiz Inacio Lula da Silva on Saturday and used the opportunity to reassure investors worldwide that "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. "I think it's a recognition that the stability not only of our economic system, but also our political system, is extraordinary. I think that not just the Chinese government, but every investor, can have absolute confidence in the soundness of investments in the United States."

Since taking office, President Obama has taken great pains to place the blame for the economic crisis squarely on the former Bush Administration, stating recently "By any measure my administration has inherited a fiscal disaster."

Today President Obama rolled out plans to use the grassroots organizing apparatus Organizing For America, which began as his campaign donation network, to help push for wide public support of his increasingly unpopular budget.

David Plouffe, who was Obama's campaign manager and is now an adviser to OFA, called this effort the "first major engagement" of the group in the legislative process and said in a statement that it will call on supporters "to help the President win the debate between those who marched in lockstep with the failed Bush economic policies and now have no new ideas versus the Obama agenda which will help us manage the short term economic crisis and puts us on the path to long term prosperity."

Events coordinated through the OFA are planned throughout the country for this upcoming Saturday, March 21st, 2009. It will be interesting to note if those who rallied to his campaign for President will help with the fundamental tasks of the office of President, including the widely-unpopular budget proposal.

Today the White House announced increased scrutiny of TARP management, as well as a revamped program through the Small Business Administration to foster entrepreneurial growth. President Obama expressed outrage--including stumbling at one point and stating that he was "choking on anger"--over the revelation that AIG paid out over $165 million in bonuses to employees involved in the operation that caused the insurance giant to become the recipient of over $170 billion in government assistance. Andrew Cuomo, the New York State Attorney General, has given AIG until 4 p.m. EST to reveal the names of the bonus recipients or that they may be subpoenaed.

"How do they justify this outrage to the taxpayers who are keeping the company afloat?" President Obama asked.

Speaking before The President, Treasury Secretary Timothy Geithner spoke of the systemic risk involved in the financial sector, stating that prior to the crisis the banks were taking on "too much risk", but now they had scaled back lending and are taking on "too little risk".

"When banks individually pull back out of a sense of prudence and caution, the collective impact of those actions will make the economy weaker and make each individual bank worse off," Geithner said. "By pulling back on credit, you push businesses to pull back, and this dynamic can feed on itself."

The Obama Administration has had a hard time balancing the President's role of "Confidence-maker-in-chief" against the backdrop of the financial crisis. The current change in rhetoric has President Obama and his administration mirroring remarks made by Senator John McCain back in September of 2008 that his campaign used to paint Sen. McCain as out of touch with the reality of the building financial crisis.

Sources:

The Associated Press, Obama aides change their rhetoric on economy, March 15, 2009
The Associated Press, Obama adviser says US is in 'economic war', March 15, 2009
The Associated Press, Obama says US economy sound, reassures investors, March 15, 2009
The Washington Post, Obama's New Tack: Blaming Bush, by Scott Wilson
The Washington Post, Obama Enlists Campaign Army In Budget Fight, by Chris Cillizza
Website, Organizing For America
The Associated Press, White House says economy is sound despite 'mess', by Philip Elliott
The Associated Press, Obama Offers More Aide to Small Businesses, by Philip Elliott
AFP, McCain says economic 'fundamentals' strong, Obama attacks, September 15, 2008