Week In Review: Controlling The Crisis

This week, Barack Obama and John McCain faced off in their second debate of the campaign while concerns grew about the fighting in Afghanistan and Pakistan. But nothing dominated the news as much the deepening global financial crisis. Senior News Analyst Daniel Schorr tells Scott Simon that Bush's role in the economic crisis is "chaplain in chief."

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SCOTT SIMON, host:

This is Weekend Edition from NPR News. I'm Scott Simon. This week, Barack Obama and John McCain faced off in their second debate of the campaign. Concerns grew about the fighting in Pakistan and Afghanistan, but nothing has dominated the news as much as the deepening global financial crisis. NPR news analyst Dan Schorr joins us. Hello, Dan.

DAN SCHORR: That's right, Scott. It is deepening.

SIMON: Well, let's begin with that because President Bush has been addressing the American public almost daily, in fact even this morning, trying to exude confidence, reassure an anxious public, ask for patience. But so far, it hasn't been having much effect.

SCHORR: No. It hasn't been having much effect. He's been acting as a sort of a chaplain-in-chief, trying to reassure a very nervous public saying that - what did he say? Anxiety breeds anxiety, he says, which seemed to be a takeoff on the famous line of President Roosevelt that there's nothing to fear but fear itself. The difference is that Roosevelt inspired confidence and that President Bush was already a lame duck, already not inspiring confidence, and now, with this deepening financial crisis, I don't think that he has changed very much at all.

SIMON: Why didn't the financial package passed by Congress and endorsed by both senators Obama and McCain have the immediate effect of reassuring the market?

SCHORR: Because it hasn't gone into effect yet. This may take a month or two to really work out what it is they're going to do. There are banks, there are others waiting to be bailed out. This is not a point in which you'd say, give us time, the Treasury is working on this. We'll have a package together in a month from now. The people today who are so nervous want to see action now, and they're not seeing it.

SIMON: The figures about the losses for investors have been staggering, right into trillions of dollars. Yet financial analysts say, in fact, this is a good time to buy if you can afford it. Is there anything over the horizon that's more hopeful?

SCHORR: Not my horizon. I mean, nor, in fact, most of the investors'. I hate to be gloomy about this but the signs are that this is going to get worse before it gets better.

SIMON: Let me take advantage of the fact that you are the one news analyst whom I know about who was around in 1929, who saw what happened then. Are there some elements that led to the eventual recovery of the U.S. economy, or at least restoration of investor confidence, that happened in the early 1930s that would strike you as being a good idea now?

SCHORR: I'm not sure whether what happened from 1929 into the '30s can be very readily applied. What President Roosevelt did was to create what were called alphabetical agencies to deal with some of these problems. But the mood, as I remember, was so different. Here was a Depression that had come quite suddenly. A lot of people who otherwise could work were not working, and one knew that it would not last some time. Then you have Roosevelt who truly inspired people. Then of course, there was a war. The oncoming war also had a very important effect. I hate to say this, but the war helped to revive the economy.

SIMON: And of course, we're just a couple of weeks or a little more from a presidential election. And leadership is going to change.

SCHORR: Well, yes, and that's a very interesting point. Leadership will change - when? Not on November the 4th when we have the election. Leadership will change on January the 20th, and the question is, what happens during that period? That's a very perilous period for the United States, where there is a truly lame-duck president, another president waiting to be sworn in. But in that time, there may be important measures that one has to take, and they're not going to have much validity if it comes from a lame-duck president.

I'm not one to make suggestions to politicians as to what they should do or - what they need here more than anything else is some understanding between the candidates and President Bush that whoever wins the election, on the day after the election, there's a meeting with President Bush, and the president-elect then says, these will be the policies, and the president endorses those policies so that we would not have a period between the two events which can only work badly.

SIMON: With the advantage of using your historical experience, what are the reasons why Inauguration Day was moved from March to January?

SCHORR: In the Constitution, it used to be on March 4th, and then President Roosevelt needed to have a shorter period between the two presidents, and so there was a constitutional amendment, which changed the date from March 4th to January 20th. That's how we got January 20th. It may well be we should look at the Constitution again and change over even earlier than January 20th, like perhaps November 15th.

SIMON: Dan, thank you very much.

SCHORR: My pleasure.

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