YouTube - CNN - The Good, Bad & Ugly of Obama's Economic Speeches
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I appeared on CNN on 1/9/09 to discuss the good, bad and ugly of Barack Obama's recent speeches on the economy.
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00:00:00 00:00:04 David Sirota's new book, The Uprising, is available in bookstores everywhere.
00:00:05 00:00:08 President elect, Barack Obama, is warning of dire economic situation,
00:00:09 00:00:13 and how much worse it could get if there is not bipartisan support, and quickly,
00:00:13 00:00:16 for his stimulus plan. But will his proposals work?
00:00:16 00:00:19 Joining me now from Denver is nationally syndicated columnist, David Sirota.
00:00:19 00:00:21 He is also the author of the book, The Uprising.
00:00:22 00:00:24 David, you wrote a column yesterday, fascinating one.
00:00:24 00:00:26 In the immediate aftermath of the Obama speech called,
00:00:27 00:00:29 "The Good, The Bad and The Ugly of the Plan". Let's walk through it.
00:00:29 00:00:31 What the good first?
00:00:32 00:00:37 The good is that Obama seems to understand, at least the size and scope of the problem,
00:00:37 00:00:41 and is proposing a robust package of public spending.
00:00:41 00:00:46 And we know that public spending is probably the most efficient way to stimulate the economy.
00:00:46 00:00:49 Some people, though, are saying that there isn't enough public spending in this.
00:00:49 00:00:56 Well, it gets to the bad. The bad part of this is that he is also including a lot of tax cuts
00:00:57 00:01:02 and he seems to be paying for those tax cuts with that public spending.
00:01:02 00:01:06 In other words, he's taking the money that could be going to public spending,
00:01:06 00:01:11 and proposing putting it into a lot of tax cuts that a lot of people don't think are gonna work.
00:01:11 00:01:14 So why do you say the tax cuts are bad? Because if you look at the other side of the political fence,
00:01:15 00:01:17 or on the Republican side, they believe that the tax cuts are good
00:01:17 00:01:19 and there probably needs to be more of them.
00:01:20 00:01:24 Well, because the data tells us that the best way, the quickest way, the most efficient way,
00:01:24 00:01:27 to stimulate the economy, is through public spending.
00:01:27 00:01:31 Mark Zandi of economy.com, one of John McCain's advisors,
00:01:32 00:01:37 had said that you get about $1.58 GDP benefit with public spending.
00:01:37 00:01:42 You only get $1.23 or $1.24 when you put that money into tax cuts.
00:01:42 00:01:46 So, if we want to stimulate the economy in a short term, quick kinda way,
00:01:46 00:01:50 the best way that we know how to do that is through public infrastructure spending,
00:01:51 00:01:53 unemployment insurance, food stamps.
00:01:53 00:01:56 We'll get to the ugly in just a second David, but do you have enough information
00:01:57 00:02:00 about what's in this plan to be able to say whether or not it would work?
00:02:02 00:02:07 Not yet, and that's a good point. We don't know what the final size of the package is gonna be.
00:02:08 00:02:13 We don't know what percentage is gonna spending, what precise percentage is gonna be tax cuts.
00:02:13 00:02:18 It's still a negotiation in process, that's absolutely true.
00:02:18 00:02:20 Alright, so give us the ugly of all of this.
00:02:21 00:02:28 Well, the ugly was that Obama seemed to mention that he wants to connect deficit reduction
00:02:28 00:02:31 to entitlement, "entitlement reform."
00:02:31 00:02:34 Now, entitlement reform refers to social security and Medicare.
00:02:34 00:02:40 Now when you tie deficit reduction to entitlement "reform", it usually has meant in the past
00:02:41 00:02:46 efforts to try to cut those programs. That's a bad idea in a bad economy.
00:02:47 00:02:51 Medicare and social security are very, very stimulative to the economy.
00:02:52 00:02:53 You do not want cut those programs.
00:02:54 00:02:57 There was one other aspect to all of this that John Dickerson from Slate Magazine
00:02:58 00:03:00 picked up, he noticed how this was being sold. He writes,
00:03:01 00:03:05 "For a president who has repeatedly promised an entirely new way of doing business in Washington,
00:03:05 00:03:10 Obama's address had a deep familiarity: Doom was its central and recurring message.
00:03:10 00:03:13 Unless the federal government acts quickly and boldly (and expensively),
00:03:13 00:03:15 the roof is going to cave in."
00:03:15 00:03:18 It's almost like he's using the tactics of the Bush administration.
00:03:18 00:03:21 As it sold security, to try to sell us economic recovery package.
00:03:23 00:03:26 I think there is something to that but I don't necessarily think that's a bad thing.
00:03:26 00:03:32 Every crisis is an opportunity and I think that this economic crisis is an opportunity
00:03:33 00:03:38 to reassert the role of the government as a force for good in the economy
00:03:38 00:03:39 on behalf of the middle class.
00:03:40 00:03:44 We haven't had that in the last 30-35 years. And I do think that that's a paradigm shift,
00:03:44 00:03:47 at least from the past couple of decades.
00:03:47 00:03:50 David Sirota in Denver this morning. It's good to see you David, thanks for coming in.
00:03:51 00:03:52 Thanks for having me John.
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