Incoming, outgoing presidents offer dueling fixes for economy

McClatchy NewspapersNovember 22, 2008 

WASHINGTON — The incoming and outgoing presidents Saturday urged solutions to the country's economic crisis that seemed to be worlds apart.

President-elect Barack Obama, reversing his post-election practice of not announcing major policy initiatives until he takes office, promised a sweeping, New Deal-like plan to jump-start the economy by creating 2.5 million public works and alternative-energy jobs as he implicitly criticized President Bush yet called for bipartisan support.

Bush, meeting with international leaders in Peru, warned against government intervention in free markets after weeks of overseeing one of the largest government financial interventions in U.S. history.

The two captains seemed to be trying to steer the ship of state in very different directions. Even more unusual was that Obama offered his policy prescriptions while Bush was abroad and speaking on a similar theme.

Obama, in the first of what aides say will be weekly radio addresses to the nation, said he will take aggressive steps to revive the economy after his Jan. 20 inauguration.

"I have already directed my economic team to come up with an Economy Recovery Plan that will mean 2.5 million more jobs by January of 2011 — a plan big enough to meet the challenges we face that I intend to sign soon after taking office," Obama said.

The bad news of recent days — marked by further stock declines, plus new data showing increased unemployment and declining home purchases — signaled "an economic crisis of historic proportions" with the "risk (of) falling into a deflationary spiral," Obama said.

While saying he "will need and seek support from Republicans and Democrats," Obama indirectly blamed Bush and his GOP congressional allies for much of the current malaise.

"There are no quick or easy fixes to this crisis, which has been many years in the making, and it's likely to get worse before it gets better," Obama said. "But January 20th is our chance to begin anew — with a new direction, new ideas and new reforms that will create jobs and fuel long-term growth."

Obama urged "long-term investments in our economic future that have been ignored for far too long." He vowed to "put people back to work rebuilding our crumbling roads and bridges, modernizing schools that are failing our children," developing wind and solar power and making more fuel-efficient cars.

Obama has already had a positive impact on financial markets by allowing the leak Friday of his selection for the next Treasury secretary, Tim F. Geithner, president of the New York Federal Reserve Board. Battered markets rose in response.

Chris Byrne, a White House spokesman, said Obama had not spoken with Bush or given him notice about the radio address or its contents.

"We're talking about the president-elect, and certainly it's his prerogative to give such an address if he chooses to do so," Byrne said.

Byrne declined to comment on Obama's indirect criticisms or substantive economic claims.

Obama's aides defended his speech.

"Barack Obama made it clear that he wants to hit the ground running as president, and a critical part of that is developing the economic plans necessary to create job growth and stimulate the economy," said Jen Psaki, an Obama spokeswoman.

Obama earlier spoke with Bush about the president-elect's plans to revive the economy, Psaki said, and he has reached out to Republican leaders in Congress to lay the groundwork for moving legislation after the inauguration.

Obama, she added, will continue to give weekly radio addresses.

Bush, on his last official foreign trip as president, acknowledged there had been "economic turmoil," but he urged other leaders at the Asia Pacific Economic Cooperation summit in Lima, Peru, to "resist the temptation to overcorrect by imposing regulations that would stifle innovation and choke off growth."

While Bush said the spreading global crisis shows "there are times when government intervention is essential," he added that it should be only temporary.

"I think we ought to focus our efforts on three great forces for economic growth — free markets, free trade and free people," Bush said.

The dueling addresses by Democrat Obama and Republican Bush highlighted their stark differences over the long-term role of government in stimulating economic growth.

Bush criticized Congress for failing to ratify bilateral free-trade agreements his administration has negotiated with Colombia, Panama and South Korea.

Despite the financial fears now gripping much of the world, Bush took credit for having helped spur economic growth in many countries by opening markets, expanding trade and providing U.S. aid.

"Our nations must maintain confidence in the power of free markets," Bush said.

Obama painted a darker picture. He praised Congress for passing "a long-overdue extension of unemployment benefits" but said more urgent steps are needed.

"We have now lost 1.2 million jobs this year, and if we don't act swiftly and boldly, most experts believe that we could lose millions of jobs next year."

While Obama said he would "welcome ideas and suggestions from both sides of the aisle," he added: "But what is not negotiable is the need for immediate action."

MORE FROM MCCLATCHY:

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McClatchy Newspapers 2008

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