Tuesday, August 9, 2011

Even Obama's Press Secretary Is A Disaster

Yesterday, after Obama's disastrous press conference, Jay Carney, his press secretary gave one that would probably have been equally disastrous if anyone was actually watching.  He was a bit evasive on the proposals the President would submit to the super committee, wouldn't admit that the downgrade was even partially the fault of this administration and then gave a bizarre response when asked why the President waited 3 days to respond to the downgrade.  You should read the whole Q&A portion, it's pretty enlightening into the mindset of these people:

Q I know you said he’d be specific, and there has been this discussion before about how he communicated his specific recommendations and desires with Congress in the grand bargain. So my question is, how is he going to do it differently this time, or is it going to be different?
MR. CARNEY: ... I think many of you know with a great level of detail what the proposals were that he worked on with the Speaker of the House. I think that those are reflective of the approach that this President will take, the tough political choices he's willing to make, and the fact that he is not just willing to but demanding to lead, in this case, and take the case to Democrats about why we need to take further measures to get our deficit under control and our debt under control, and he looks forward to finding partners in that cause in September.

He has said this in the past, in prior press briefings, that many of the people int he White House briefing room know the details of Obama's proposals and that should somehow be enough.  Well none of us outside the beltway know, and don't we have the right to?  From our position he has only given speeches and those are full of him talking about raising taxes in a slow and probably recessionary economy.  If that is reflective of the approach the President will take, maybe he shouldn't be involved with the super committee.  I'm also not sure about the phrase "he is not just willing to but demanding to lead."  From my experience, leaders just lead, they don't demand to lead.  The people demanding to lead are whiny people with power trips who nobody likes or trust which is why they won't follow them.

Q But last night on CNBC, Secretary Geithner was asked if the administration's policies bear any responsibility for this downgrade, and he said, "Absolutely not." So is that true? The White House believes that its policies have no responsibility for the downgrade?
MR. CARNEY: I couldn't say it better than the Secretary of the Treasury said it.
Q So you haven't added any --
MR. CARNEY: The downgrade -- but, Ed, I assume you read the S&P document. The downgrade had everything to do with the political gridlock.
Q Not everything. Partly.
MR. CARNEY: This -- there was no economic justification. It was based -- the economic justification was wholly changed after the $2 trillion error, which is not exactly a rounding error, was identified in about 10 minutes by the folks over here who have expertise in it.
Q But why can't you say, okay, there were -- gridlock is a problem, but President Bush didn't pay for two wars, didn't pay for prescription drug benefit; Republicans bear responsibility. And you know what, we had a stimulus of nearly a trillion dollars; we've had other things we didn't pay for.
MR. CARNEY: That is not --
Q Why can't you say, "We have some of the responsibility"?
MR. CARNEY: We have the responsibility to take action and compromise, and we have shown our willingness to do just that and reach across the aisle, meet Republicans more than halfway, make politically tough choices like taking on the issue of the need to strengthen our entitlement programs and make changes in them as necessary.
It's really amazing when they won't even take part of the responsibility for the downgrade.  Federal spending in 2011 is 28% higher than in 2008!  And Obama's budget for 2012 actually had deficits above the prior baseline scenario (it was so bad it was voted down unanimously in the Senate).  And the economic justification was not "wholly changed" after the error.  $2 trillion sounds like a giant number, and it is, but its a 10 year number, so the error in any near to medium term budget year is very small.  As S&P wrote in their response the 2015 net debt to GDP ratio went from 81% in the original analysis to 79% after the error was fixed.  Not that big a deal and it clearly is still at a level that is not consistent with AAA status.  The S&P concluded it's response to say "the primary focus remained on the current level of debt, the trajectory of debt as a share of the economy, and the lack of apparent willingness of elected officials as a group to deal with the U.S. medium term fiscal outlook. None of these key factors was meaningfully affected by the assumption revisions to the assumed growth of discretionary out lays and thus had no impact on the rating decision."  And even if the downgrade was entirely political, can anyone really say with a straight face that Obama has been Mr. Bipartisan since he took office?  As I wrote yesterday, they really don't seem to be taking this seriously.

Q Last thing, on Norah's question of urgency. The President said there's urgency. Why, then, did it take him three days to comment on the downgrade?
MR. CARNEY: I think our opinions on this were pretty well expressed, beginning on Friday --
Q But what about the American people who are wondering about this and are looking for the President to react?
MR. CARNEY: Well, I think -- again, I don't think most people over the weekend were wondering where the President stood or where the administration stood on this.

People were talking about the downgrade all weekend, it probably would have been nice if he gave a speech over the weekend that actually sounded Presidential and serious, I bet the market wouldn't have been down 600 points if he did that.  Instead we got a disaster of a speech, 50 minutes late, without any questions from the press in which the President blew off the downgrade and even talked about making the deficit/debt worse.  No wonder even his Press Secretary admitted that most people don't really care what the President thought about this.  He's clearly over his head and as Bret Stephens pointed out, just isn't that smart.

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