Reflections on Obama Press Conference

November 24, 2008

An effort was made to reassure the world that the incoming administration will begin work on crafting plans to restore growth today, but the reality is that 57 days remain before power is transferred. That’s a very long time for a crisis that moving so fast.

The goal of creating 2.5 million new and/or saved jobs in 2009-10 is enormously ambitious. I doubt it will be achieved, but setting a goal that is a reach is a good idea. If the U.S. economy contracts 0.5-1% next year and presuming productivity expands 1%, which is not assured during a recession, growth needs to rebound in 2010 by close to 5% to raise nonfarm payroll jobs by 2.5 million on balance over the coming two years.

Obama pressed several broad concepts that were big elements in his campaign. These included a sharp drop in  partisan politics, taking actions always with an eye to possible international ramifications, tailoring policy to meet both short-term goals like ending the recession and long-term objectives like healthcare reform and rebuilding infrastructure, pitching policy to improving the relative strength of the middle class, and being candid with the American people and global audience about long-term objectives.

The press conference was appropriately short on specifics. The economic advisors first have to crunch the numbers, and the economy may be at a very different place on January 20th than now, so the kind of fiscal stimulus that will be needed may change between now and then. The conference today was meant to introduce key players of the administration, defend the choices, and begin a dialogue by creating good communication.

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