Obama Speech: It’s Time to Bail Out Main Street
President Barack Obama today used a speech at the Brookings Institution to say it was time to bail out Main Street and small businesses, and proposed a program that isn’t sweeping but would touch on several fronts:
President Obama on Tuesday outlined a broad new proposal to try to spur jobs and give more help to Main Street consumers and businesses.
In a speech at the Brookings Institution, Obama said he wants to give small businesses tax breaks for new hires and equipment purchases. He also wants to expand American Recovery and Reinvestment Act programs and spend some $50 billion more on roads, bridges, aviation and water projects.
Finally, Obama would offer consumers rebates for retro-fitting their homes to consume less energy.
“Even though we have reduced the deluge of job losses to a relative trickle, we are not yet creating jobs at a pace to help all those families who have been swept up in the flood,” Obama said. “And it speaks to an urgent need to accelerate job growth in the short term while laying a new foundation for lasting economic growth.”
Obama did not give a price tag for his proposals but pointed out that there is more wiggle room in the federal budget since the 2008 financial system bailout program will cost $200 billion less than expected.
“This gives us a chance to pay down the deficit faster than we thought possible and to shift funds that would have gone to help the banks on Wall Street to help create jobs on Main Street,” Obama said.
Fox News’ report notes Obama’s message but also stressed his potshots at GOPers for getting the United States into the present mess:
President Obama used his speech rolling out a stimulus-style jobs program Tuesday to point the finger at Republicans for allegedly facilitating the economic crisis and then foisting it off on his administration to solve.
While praising his own team for pioneering “ambitious” financial reform and “sweeping” economic recovery initiatives, the president took some pointed shots at Republicans who are now blasting the latest package as a spend-crazy “stimulus two” that will drill deeper into the deficit.
“We were forced to take those steps (to jump-start the economy) largely without the help of an opposition party which, unfortunately, after having presided over the decision-making that had led to the crisis, decided to hand it over to others to solve,” Obama said, starting his address with a history lesson on the roots of the recession.
He said the crisis was caused not just by economic weakness but the “weakness in our political system” — one corroded by the “bitterness of partisanship,” and the “endless campaigns focused on scoring points instead of meeting our common challenges.”
“We’ve seen the consequences of this failure of responsibility. The American people have paid a heavy price,” Obama said, calling the nation’s unemployment a “human tragedy.”
But Reuters, in an analysis, says Obama’s “modest” approach to jobs isn’t winning him a ton of friends:
U.S. President Barack Obama’s middle-road approach to surging unemployment is likely to face resistance from many quarters, with some accusing him of spending too much and others of doing too little.
n a speech Tuesday, Obama laid out proposals to alleviate the worst job market since the early 1980s, although he did not outline a concrete price tag for the plan.
The plan includes several measures aimed at small businesses, including:
* Eliminating capital gains taxes for one year
* Providing tax deductions for businesses that hire
AND:
The modest nature of the president’s proposal, which effectively proposes very little in the way of new spending, should make it politically palatable, particularly in a Congress controlled by his fellow Democrats.
Many politicians would like to be seen taking action ahead of midterm congressional elections in November 2010. Mounting job losses could threaten Democrats’ grip on Congress.
However, the strategy wins him few friends outside of Washington’s political middle.
Indeed, by looking too ardently for common ground, the president risks losing the political momentum required to address a labor market crisis that the Federal Reserve predicts will linger at least another three years.
Once again key questions seem to be: where is “the middle” in America? It’s difficult to win elections without it — but can you score victories if you’re perhaps too much in the middle of the middle at a time of intense ideological and partisan polarization?
26 Responses to “Obama Speech: It’s Time to Bail Out Main Street”
When you allow corrosion to erode a structure until its very foundation begins crumbling, guess where you have to start to rebuild it at?
Trickle-Up Economics is the only way to proceed right now. If this causes dismay to those at the top, I urge them to remember how we got where we are and perhaps look in the mirror for someone to take out their frustrations on.
How can it be 'tricke-up' economics if the money is coming from the top in the first place?
What 'foundation' is crumbling?
How did we get here? I would point my finger at government meddling, perhaps you have a different explanation.
I point to trickle down economics where we tax the middle to pay for the programs for the poor while giving the rich tax breaks on the middle classes childrens and childrens childrens money. I also point to the childish habit of cutting taxes without cutting spending or growing spending without funding it. Lastly unpegging the dollar from gold.
This part is a complete crock:
During the debate over the stimulus, the GOP pushed for more tax relief for businesses and offered alternative legislation- to which the response from Dems was ridicule.
Now, 10 months later when the stimulus crafted by the Dems has failed, Obama wants to introduce the ideas that the GOP wanted to include in the first place, and he does so while using false rhetoric saying that the opposition party wouldn't participate in the initial debate.
Talk about the bitterness of partisanship. If Obama really had the courage of conviction to act in a bipartisan fashion, he would have stuck to his guns in initially supporting a higher percentage of tax cuts in the first stimulus package. Instead he caved to the pressure from his own party members in Congress to lard up the bill and fulfill their wish lists.
What tax breaks are you talking about for the 'rich'? The more money a person makes, the higher the tax liability, both in terms of gross amount and percentage of income.
It is up to congress to control spending. We've had Democrats in charge of congress since 2006. The Republicans did a crappy job prior to that, but that does not excuse the crappy job of controlling spending that the current congress has done.
I think that we went off the gold standard quite a while ago.
And, just one more point about taxes, an old story:
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until on day, the owner threw them a curve. “Since you are all such good customers,” he said, “I'm going to reduce the cost of your daily beer by $20.”Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men — the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings. “I only got a dollar out of the $20,”declared the sixth man. He pointed to the tenth man,” but he got $10!”
“Yeah, that's right,” exclaimed the fifth man. “I only saved a dollar, too.
It's unfair that he got ten times more than I!”
“That's true!!” shouted the seventh man. “Why should he get $10 back when I got only two? The wealthy get all the breaks!”
“Wait a minute,” yelled the first four men in unison. “We didn't get anything at all. The system exploits the poor!”
The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.
I think we are getting “tinkle down” platitudes. How about we should have been kicking ass with the bankers who did not lend to small businesses, and to this day get LOW cost funds and invest in guarantees without lending. Bush should have started the ass kicking and O should have continued it.
Hear, hear, dduck.
Luv it. Got one for the liberals?
Yeah, Bush did the initial coddling and Obama has continued it.
Perhaps, President Palin will put an end to it in 2012.
Ohhh, that was cruel, I almost choked on my caviar (Beluga of course).
I see that much like those that do not see social spending as a problem you do not want to fix the situation. Yes going off the gold standard happened long ago but we could not “invent” money if that had not happened, this is how cause meets effect on that one. Then Reagan cut taxes for those at the top while salaries stagnated and began to fall for the middle class and unsurprisingly fewer of them every year paid any federal taxes since they no longer made enough all while inflation continually rose. What Reagan sanely and wisely began we decided to double down on for 20 years or so and low and behold we have the incredibly shrinking middle class. If you do not want to address inflation(the gold standard) nor progressive taxation then you have what we have here, a shrinking amount of people paying taxes and a growing amount of people that to pay taxes will need to live with their parents or maybe just cut back on groceries and we are just beginning to feel those effects. Meanwhile those at the bottom that do not see inflation but instead “rising costs” will want more and more action taken to “fix” this or that problem so that they can continue to live what is now left of the American dream and since we live in a democracy they will continue getting it and the deficit will continue to rise because we cant defy those that vote them in (unless they want to be sent packing) and we cant raise taxes on those that have the money that was in the middle class before we began this insanity because they own the politicians(just to be clear I am speaking specifically of the top .01% not the top 1% there is a vast difference between the two). So like all ideologues this is just the country that I think you deserve, not that you want but what we want and what we deserve are usually very different things.
“What tax breaks are you talking about for the 'rich'?”
Have you missed the last twenty years of tax history or do you really think that everyone has benefited as much as the top .01% since 1980. Here is a hint, if we want a middle class we will either need to pay them more or shift money from those at the top to everyone else because taxes is not what is dropping them into the lower classes. Otherwise get used to our growing banana republic because you are helping to create it by putting on ideological blinders.
Actually it began with Papa Bush and the SNL crises. For that matter so did the habit of bailing out industries.
Sounds like we have a fiat currency crisis and we're all screwed.
That is something not only can we agree on but if we ever meet in person remind me I owe you a beer because that is exactly what is happening.
How about a nice Chianti Reserva, since you guys like Fiats so much. To be a loyal American, however, a Dodge with a smooth Coors, would go well.
Want to bail out main street? Stop spending main street's money on more federal programs and reduce the deficit, don't triple it.
dduck12, MSF and Leonidas. You're all right, but you're not going far enough. Take back the bailouts from the banks that aren't lending it. If they have to go into bankruptcy, well, since they're not doing their jobs (lending) anyway, I don't see how it could be worse than what we've got now. Sue the money managers who mis-managed the money and take back their bonuses in order to shore up the banks. Sue the regulators who didn't do their jobs and/or the officials and the representatives and senators who got in their way (always aim high). End corporate welfare, including the farm subsidies and regulations that are meant to protect large businesses from smaller ones.
Smile and be polite while doing so.
Obama's target audience is the Dem-territory sub-50-IQ core. Blaming Bush almost a year afterward? (Heads up. Expect Bush to be blamed again if things don't improve, or there is some bad news, between now and November 2010 in Afghanistan. I'm surprised ObamaCo has neglected Iraq, too.)
The stimulus and other interventions by ObamaCo's Washington have often been a failure and ridden with problems and dishonesty (not only today at Brookings, but even with figures made up to claim credit for jobs “saved” or “created,” for example). The Dems (who have had it all their way, notably through strong-arm and low-grade means) can't blame anybody but themselves. But they blame Bush and the Republicans. Presumably there are people still stupid enough to accept and believe that.
The desire for more “investments” [sic] is an admission of the failure everyone already knows about. What is the goal now? Play-time this, play-time that, coupled with more appeals to the stupid: “Spend our way out of this mess,” while failing earlier to rescue us from it and arranging to make things worse given the increase in interventionism as well as horrible deficits and debt built-up (for next to nothing). What else? Will there be tax credits and subsidies that might aid favored companies, including those with some ties to reducing energy or other “green” acts, which would benefit possibly some of the same favored parties (and more, in theory) who stand to gain from any “green” energy initiatives by Washington already, not to mention the “cap-and-trade” scam that is sought?
Too bad. A great deal of the public strongly favored sensible measures, as plenty of people have listed time after time (including on this site) that merit risking large expenditures and intervention. (Much of the public is in favor of regulatory reform of the financial sector which during ObamaCo's reign is enjoying a massive consolidation and windfall. In addition to probable corruption and insider game-playing, we're also encumbered by having Washington run by out-of-touch elites acting just like MBAs making similar out-of-touch top-executive-level decisions frequently in the business world — but with government, often worse consequences.
“Take back the bailouts from the banks that aren't lending it.”
[Time for another very-rare true gem from me -- so obvious even I can spot it, and I get to post it.]
I would say, yes, take back the bailouts — and some interest, too: How about charging them credit card interest rates?
* * *
I disagree that Washington should ever tell banks to lend money (especially to poor risks just to buy cheap votes), or do to anything. It's enough reasonably to forbid what they should not be doing. To go beyond that to make affirmative commands, to address the private sector in the imperative as though they are military or bureaucratic subordinates is not federalist and more importantly, is not American.
A more intriguing thing is for the states to open their own banks (the federal government should never do such a thing — it would be anti- and un-American), as within their territories in our system of government they may operate largely as they see fit. (They just can't coin create their own money, and using bank notes would run afoul of federal authorities as well as the Constitution given the obvious intention.) I've heard one extreme lefty say it about the federal government — create a People's Bank with low- or zero-interest loans, which is alien to this country. But I've heard Ed Schultz realistically describe and laud the idea of states opening and running their own banks (complete with reasonable loan conditions and non-usurious interest rates on loans and credit — and think of this in light of credit for small business and stimulative effects this might have right now).
“Take back the bailouts — and some interest, too: How about charging them credit card interest rates?”
Hello, bailed-out banks. It's time to pay Uncle Sharkey.
Wow, did you hijack Palin's 2012 campaign speech, or are you Holder on steroids. Taking the money back means the Gov. will try to lend it out (tinkle down). No, you have to force them to lend, or take away their charter, or whatever. Plus, do you want all the lawsuits to be tried in NYC Federal Court. Sorry, too crowded with terrorist trial. However, since O showed us, populist appeals seem to work pretty well.
Take back the bailouts from the banks that aren't lending it
Do you see the difference? I don't want the government forcing the banks to do anything. I just don't want it helping them to cover up their failures. If I can't do my job, I lose it. The government gave the banks the money so that they could continue to lend (well, that's what we were told anyway). This is more of a one time contract situation than a law.
So it's good they got all that money to keep congress from doing something even worse with it? That almost has some merit, considering that it looks like free money to those guys. Even so, I can't imagine anything much worse than rewarding failure.
And yes, sue them. The events leading up to those bailouts (Bush's chicken little dance, the Democrats threatening to let it die unless the Republicans joined them, Bush mentioning marshal law during his little “pep talks” to the holdouts) were creepy from the beginning. Maybe if their entire accumulated booty was threatened, they would be willing tell the rest of the story.
So, yeah, I'm sticking to my guns on this one.
“I don't want the government forcing the banks to do anything.”
That's my position as well, that Washington shouldn't compel anything from anybody for reasons like this.
The rationale that there's every right to be strings attached to any money (for bank bailouts but also for things like highway trust funds), which is routinely abused (going outside the legitimate scope of related demands), doesn't matter. That it should be telling anybody to do things at all is what is fundamentally at issue.
“I just don't want it helping them to cover up their failures.”
I agree completely. In cases like this (bailouts and “rescues,” et cetera) the solution isn't to attach all kinds of strings (going to the wildest extremes in theory, “social responsibility” nonsense, for example) to various bailout and other dispensed funds. The obvious solution is not to dispense such funds and not to bail out parties or to intervene at all.
As for the more complex (or “subtle” or “nuanced,” as fluffy lefties say these days) matters like filling “needs” the banks aren't meeting, I still say the federal government has no business forming a new PC-activist ”People's Bank” (sappy at the least, frighteningly sinister at its greatest and worst) of the USA, and while I am wary of the states' risking being stupid or wrongful in doing the same thing, the states do have the right to do this — form their own banks. (Imagine not only subsidized low-interest loans but above-market subsidized interest paid on deposits, and of course, what would be thought of promptly, tax-free interest paid on somewhat-lower-rate interest on deposits. [The tax break would replace subsidies and above-market rates.])
By the way, Professor,
“If I can't do my job, I lose it.”
Why has Geithner been as lucky as he has been, for so long?
Obama needs to do something or continue to be seen as being in bed with the bank insiders that are in the process of consolidating the financial industry (I still say the banks, who have long interbred with investment companies, could mingle with the insurers, health care or no health care in the future — think of auto and fire and home insurance, alone, as a Big Money market and community to consolidate). Note that the banks are doing well enough they are hurrying to repay the federal government to free themselves from restrictions and public scrutiny, particularly over lavish executive compensation and other hot issues.
And there's a “need” to extend and expand the bailout process, now?
(TARP is being extended until October, 2010 — several more months. Aside from suspicion about new misuses of the money to buy votes by ObamaCo, and the schedule's implication which is that vote-buying expenditures and propping-up of firms and parts of the economy will continue until the elections next year, that the program in its current form is being extended, alone, is a fact that is an irritant.)
Sorry, we still disagree, banks are supposed to lend money. They can't just get .25% money and invest it with no risk. Why can't you do that? because you are not a “bank”. It's BS, and yes you can force them, all you need are a pair of B_____.