Robert Stein 1924-2014

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Tuesday, February 17, 2009

Obama as Confidence Man

When he signs the Recovery and Reinvestment Act today, the President will be asking Americans to take a leap of faith into a future that is darkening rapidly.

Today's bad news is that California is going broke, Kansas is following suit and even Donald Trump's casino empire is filing for bankruptcy. Yet Barack Obama will try to reassure us that the biggest financial gamble in American history is our best choice for saving the economy.

His inspirational skills are facing the supreme test. Before taking office, he told us "the very fact that this crisis is largely of our own making means that it is not beyond our ability to solve. Our problems are rooted in past mistakes, not our capacity for future greatness. It will take time, perhaps many years, but we can rebuild that lost trust and confidence."

Confidence is the key, but it is a word that cuts two ways, meaning trust and also deception, as in "confidence game." From all sides, politicians, economists and unaffiliated naysayers are attacking the stimulus bill as too large or too small, with too much spending or too many tax cuts, too slow or too scattered--too scary in every conceivable way.

We are back to a time when FDR's warning that "the only thing we have to fear is fear itself" is becoming a main element of our dilemma--consumer fear of spending, banks' fear of lending, politicians' fear of making mistakes.

It may help to recall what the then President-Elect said about the origins of this mess:

"We arrived at this point due to an era of profound irresponsibility that stretched from corporate boardrooms to the halls of power in Washington, DC. For years, too many Wall Street executives made imprudent and dangerous decisions, seeking profits with too little regard for risk, too little regulatory scrutiny, and too little accountability. Banks made loans without concern for whether borrowers could repay them, and some borrowers took advantage of cheap credit to take on debt they couldn’t afford. Politicians spent taxpayer money without wisdom or discipline, and too often focused on scoring political points instead of the problems they were sent here to solve. The result has been a devastating loss of trust and confidence in our economy, our financial markets, and our government."

As he signs the new bill, however imperfect, the politicians and pundits may want to take time out from their yapping and join the American people in giving the President a vote of confidence.

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