James Fallows about Obama's speech - An impressive piece of explanation.

[Mass]

http://jamesfallows.theatlantic.com/archives/2009/04/an_impressive_piece_of_explana_1.php

An American president can't expect a large real-time audience for an hour-long, policy-dense speech delivered in the middle of the work day. But the timing of his speech at Georgetown University just now was fine for me, around midnight in Beijing, and for the moment these real-time thoughts.

What I liked about the speech:

- Obama crafted the message with an intellectual thoroughness and emotional steadiness that I think will impress its real audience: not the students sitting at Georgetown or those like me watching live, but the politicians, financiers, and members of the commentariat who will read the text and respond after a little while. He showed he was aware of criticisms and was willing to state them in recognizable form before offering his rebuttal. (Think of the contrast of GW Bush or Cheney acknowledging criticism of their strategy and world view. Or even Richard Nixon.)

...

- He used analogies that were homely, accessible, and clarifying without being patronizing. Eg, "Just as a cash-strapped family may cut back on luxuries but will insist on spending money to get their children through college, so we as a country have to make current choices with an eye on the future. If we don't invest now in renewable energy or a skilled workforce or a more affordable health care system, this economy simply won't grow at the pace it needs to in two or five or ten years down the road." These are harder to come up with than they seem.

- Pushing just hard enough with a vivid metaphor, that of building on a rock. Viz:

There is a parable at the end of the Sermon on the Mount that tells
the story of two men. The first built his house on a pile of sand,
and it was destroyed as soon as the storm hit. But the second is
known as the wise man, for when "...the rain descended, and the floods
came, and the winds blew, and beat upon that house...it fell not: for
it was founded upon a rock."

We cannot rebuild this economy on the same pile of sand. We must
build our house upon a rock. We must lay a new foundation for growth
and prosperity - a foundation that will move us from an era of borrow
and spend to one where we save and invest; where we consume less at
home and send more exports abroad.


What I wasn't so crazy about: personal tics (of my own) in both cases.
...

But on the whole, a quite impressive job. No matter your view of his policies before this speech - hostile, lukewarm, enthusiastic -- reasonable people would have to be moved an increment toward a more positive view by the speech.*

...

[TayTay]

1. The President did address the bailout vs. nationalization controversy

In this part of the speech (transcript on the NYTimes site)

On the other hand, there have been some who don't dispute that we need to shore up the banking system, but suggest that we have been too timid in how we go about it. They say that the federal government should have already preemptively stepped in and taken over major financial institutions the way that the FDIC currently intervenes in smaller banks, and that our failure to do so is yet another example of Washington coddling Wall Street. So let me be clear – the reason we have not taken this step has nothing to do with any ideological or political judgment we've made about government involvement in banks, and it's certainly not because of any concern we have for the management and shareholders whose actions have helped cause this mess.

Rather, it is because we believe that preemptive government takeovers are likely to end up costing taxpayers even more in the end, and because it is more likely to undermine than to create confidence. Governments should practice the same principle as doctors: first do no harm. So rest assured – we will do whatever is necessary to get credit flowing again, but we will do so in ways that minimize risks to taxpayers and to the broader economy. To that end, in addition to the program to provide capital to the banks, we have launched a plan that will pair government resources with private investment in order to clear away the old loans and securities – the so-called toxic assets – that are also preventing our banks from lending money.

The President believes that out-and-out nationalization of the banks would reduce confidence in the system as a whole. I still disagree with this and find the criticism of the bailout system of Sec Geithner and Lawrence Summers to be flawed. But, it was good to hear this from Mr. Obama. It is a direct quote, not something filtered through all those media lenses.

[Median Democrat]

2. The FDIC Has Taken Over (Nationalized) 23 Banks in 2009 Alone

Two were taken over last week (April 10). By comparison, 25 banks were taken over in 2008, so the Obama administration is well on its way to exceed that total this year. So, it is wrong paint the Obama administration as categorically against bank nationalization, because the facts prove otherwise.

[TayTay]

3. Agreed

and the President's speech made no reference to that.

There is an ongoing argument that the effort currently being made in terms of recapitalizing the banks with the bailout funds will prolong the pain. A nationalization would be quicker and allow the govt to sell off the big banks into smaller pieces.

[ellacott]

4. This has been Paul Krugman's argument

[Median Democrat]

6. Pragmatically - You Don't Announce Nationalizations, You Just Do It

This is why I reference the FDIC numbers. People seem to want some broad pronouncement on nationalization, and which banks are under threat of nationalization. It is not going to happen, nor should it. Such an annoucement would just undermine the stability of the banking system, including those banks that might be in solid shape, as folks speculated regarding which banks are in trouble.

I think Obama should be taken at face value. His actions are not being driven by idealogy, and he is more than willing to nationalize banks if necessary. Conversely, some banks are doing okay, so one size fits all, and nationalization as a panacea are not going to be the policy de jour.

[TayTay]

10. Well, of course you wouldn't nationalize banks that are okay

and no one is arguing for that. The point of contention that the President was arguing on today was how to get the so-called "bad banks" back on their feet. The whole point of discussing this is to take him at his word. That might also include some disagreements on what his policies are though.

[FrenchieCat]

11. Why do you think that investors would be attracted to

investing in Banks in a country in where the government, which has touted capitalism for years after years, end up having to eat their words and nationalize?

[TayTay]

12. Because the banks are basically insolvent

and that can't be hidden from investors or anyone else forever.

Are you saying that the investors should only invest in the fakes because they feel good? That doesn't make any sense.

[FrenchieCat]

15. 1/2 of success is confidence. Take that away,

and there's not much left.

The reason that some banks "May" be insolvent is because of the value of the assets they hold.

Value is based on what...exactly? What someone is willing to pay for it of course.

If investors have confidence in the assets being sold, they would more likely pay more for them, than if they have no confidence in such.

Kind of like the house I own which is now worth 30% less than it was a year ago. Well, I'm pretty sure it will not be worth less in say 5 years, as long as someone other than just me believes that it is a worthwhile asset.

And that's the point with nationalization. It would send the loud signal that these toxic assets our banks are holding are not worth anything (which isn't true)....and in so doing would seal our economic fate.

[TayTay]

16. I disagree with that premise

I don't think we are getting any picture on what the assets are worth. The taxpayer is being asked to prop up a system that is anything but transparent. The current plan asks that taxpayer to foot the bill, take the risk and relinquish any profits, if such there be, from the bailout or rescue of these institutions.

A lot of the problem is also the insurance on the loans. I don't understand how you can mark all this stuff down, get a fair accounting of it to the taxpayers and start to move out from under this if we can't even get an honest look at the books. It makes no sense. You can't prop up a financial system the way Peter Pan brought Tinkerbell back to life, clapping your hands and saying ever louder that you do believe in bankers is not going to work.

I think it prolongs the pain. I think this will hurt the President in the long run by denying him money and trust for the other worthy programs he wishes to pursue.

We just disagree on this point. But, we shall see how it plays out. And I did like the speech today. I thought Mr. Obama was particularly strong in his clear pronouncement of his agenda and in his careful balancing of hope and realism. That worked very well. http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=132&topic_id=8342518

[Cha]

5. Key words "reasonable people"..of

which many are not even close.

"But on the whole, a quite impressive job. No matter your view of his policies before this speech - hostile, lukewarm, enthusiastic -- reasonable people would have to be moved an increment toward a more positive view by the speech.*"

[paulk]

7. what I don't understand is this -

"To that end, in addition to the program to provide capital to the banks, we have launched a plan that will pair government resources with private investment in order to clear away the old loans and securities – the so-called toxic assets – that are also preventing our banks from lending money."

This plan he alludes to seems to me nothing more than shovelling more sand under the house - it seems to contradict his whole message.

[mwb970]

8. As usual, the Freepers saw it differently....

To: LottieDah

I watched him and just came away even more convinced that he hates this country and wants to change us into a Marxist country

there is now way by now that he hasn’;t figured out he is hurting this country with his policies

When he said that the Govt has to spend, well we have no money to spend
He then said it is not fair for me and you to not be spending so he thinks the Govt has to to do it

He really believes that this country would be better off with the Govt running our lives and then the Govt throwing us crumbs.
Communism has never worked and never will.

If I have no money I cannot spend I do not have. If I do then I am causing trouble for myself
I then do not spend I do not have and that is why I have no debt what so ever.

obama on the other hand thinks that if you d not have money then you have to spend what you do not have

This man is dangerous, very dangerous and that speech is something I would expect from Chavez but not from America

16 posted on Tuesday, April 14, 2009 3:01:32 PM by manc (Marriage is between a man and a woman no sick queer sham--- end racism end affirmative action)

http://www.freerepublic.com/focus/f-news/2228973/posts

[polichick]

9. imo building a foundation upon rock requires a reformed and regulated monetary system...

I don't understand how the same ol' players, banks and practices is building a good foundation.

[KoKo]

13. I heard his speech live and was very impressed until he copped Reagan about "House Built on Rock."

Now Reagan said: "Shining City on a Hill" but the allusion was to close for me not to have a grimace.

Fallows, in his article in the Atlantic said that Obama took it from a Carter Speech.

I don't know which is the truth of it...but my read was more that he was plagerizing Reagan in a hope to get the Wall Streeters to identify him with that Bastion/Icon that they can't ever get over who brought them riches beyond their dreams. Even the kids on Wall St. with Zillion Dollar Homes everywhere, toy wives and kids...would not remember anything from the Carter speech but what they heard around the "street" about Reagan's "Shining City on the Hill."

I thought it was a very good speech but then I think that about most of what Obama does in his delivery of the content in his speeches.

But..to do this in the middle of the day and have CNBC follow up with all of Bernanke's speech at Morehouse College ...justifying what the fed has done but glossing over the real reasons why they had to do it...followed up with Maria Barteromo's interview with Larry Summers...sort of capped the day with what seemed to be Obama's PUSH BACK to his critics like: Krugman, Reich, Stiglitz and a host of others who want him to dump his economic team because they belong to the same group that caused the problems in the first place.

I don't know. Maybe Obama is just so confident this will all work out with the Foxes he's put in charge of the Hen House...that it will. He maybe read the "riot act" to the foxes and gave them their boundaries about how far to go with the hens and cautioned them their past behavior would not be acceptable.

But to continue the animal allegory: "You can't teach old dogs new tricks"...or can you if you beat and humiliate them hard enough? :shrug:

[Pirate Smile]

14. He referred to the Sermon on the Mount. Just because another politician has also

used this reference doesn't mean future people can't use it and doesn't mean he was copying Reagan or Carter. Perhaps he thought it made the point he wanted to make and that is all.

[Elidor]

17. Can anyone link a transcript of the speech?

My google-fu is weak tonight.

[GeorgeGist]

18. I see the pile of sand ...

is still capitalism.