Can Political Solutions Fix The Economy?
SCOTT SIMON, host:
Joe Nocera and NPR News analyst Juan Williams join us from New York. Gentlemen, good morning.
JUAN WILLIAMS: Good morning.
Mr. JOE NOCERA (New York Times): Good morning, Scott.
SIMON: And Joe, let's start with you. The federal government is pouring baskets of money, showering it, all over the economy, billions and billions and billions. Why isn't Wall Street impressed?
Mr. NOCERA: Well, Scott, in the immortal words of Al Michaels: Do you believe? You know, nobody believes. Nobody believes that the stimulus package is going to get the economy revved up. Wall Street is not all that - you know, there's actually a lot of mixed emotion on Wall Street about mortgage foreclosure and whether it violates contracts, and so on and so forth.
There was a guy on CNBC the other day who actually made a rant on the floor of the Chicago Commodities Exchange, and the Commodities Exchange stood up and applauded him. And finally, Scott, you know, the one action that would be immediate and send a signal, which is bank nationalization of Citi and Bank of America, if it's necessary, which it may well be, the government is now basically saying they don't want to do.
Now, the irony is, that's driving down the prices of these companies, but in terms of how to get the banks propped up again, that may be the most - the quickest, shortest-term solution.
SIMON: Juan, politically is anything more feasible? Because there are a lot of people beginning to complain about what's been done already in terms of what sort of taxpayer bite this is going to represent for the next generation.
WILLIAMS: That's right, Scott, and even as you just heard Joe talk about nationalizing the banks, the White House has been backing off that message because the reaction that comes from the Congress, and especially from the Republicans, is so negative, and the whole idea of, oh, you're heading towards socialism, you're taking over the economy.
And then the other alternative - remember, we're really talking here about trying to ease the credit crunch, get those banks going and build up the confidence that Joe was talking about - the other option is, well, wait a second, we can try to hype up or pump up the stimulus with more spending and more tax cuts, but then that runs into deficits, and that enlarges the deficits.
And next week, in fact, President Obama's team is going to have a fiscal summit and try to address the size of the deficit, even as they're spending more money. So even as he's doing that, he's got to go before the Congress next week. He wants to talk there again about building the confidence and trying to get people to understand it's not just the banks, but consumers have to be willing to spend to get retail going. And if retail gets going, that could help with employment. And if retail gets going sufficiently strong, then that could encourage the banks to loosen up on the credit.
SIMON: Joe, in a word, is Wall Street worried about deficits, too?
Mr. NOCERA: Not in the least, nor necessarily should it be. Listen, Scott, FDR got worried about deficits five or six years into the Depression. And you know, the minute he started to tighten up a little, the economy sank again. I mean, we are in - you know, we have to worry actually about deflation, about paralysis, where people won't spend, and where the economy freezes.
And the only grease in the economy right now, really, is government money. And if they start worrying too much about deficits right now at this minute - I know there are long-term problems, and they have to be dealt with - but if we start worrying too much about that right now, we are going to spiral downward. Period, end of story.
SIMON: Juan, I noticed that there are some Republican governors this week who said that they're worried - and like, half a dozen of them, including, I believe, Governor Jindal of Louisiana, Governor Palin of Alaska - say that they're inclined not to accept the money from the federal government for a lot of the projects right now.
WILLIAMS: That's right. I mean, they're going along with the line that's coming from the Republican leadership in Washington, which is that, you know, this money is being wasted, this is pork-barrel spending, it's tax-and-spend, liberal-type policy that's not going to stimulate the economy in the short run and therefore, what is it for? It's just about putting money into programs that Democrats have been wanting to rush through very quickly without proper, you know, review.
And so you get a wide - it's about six - but it's a wide swath of these Republican governors through the South. And Jim Clyburn, a Democratic leader in the House, said yesterday he thought it might be punishing towards blacks because so many black people live in that South region. Then he took it back and really was talking about poor people who would be hurt if these governors decide to stand on this kind of principle, that they're not taking stimulus money.
But you know, Scott, the Republicans are not presenting an alternative other than more tax cuts. And the question is, is that really going to stimulate the economy given what we've seen in the last eight years under President Bush? And that's why President Obama says, in some bit of angst, this is a stimulus package; you've got to have spending, you've got to have spending. So that's becoming the great divide between the two parties.
SIMON: Juan, I don't want to let you go without talking about Roland Burris. Mr. Gibbs said yesterday that he hopes - that President Obama hopes the senator from Illinois is going to use this weekend to reflect on what's best for his state and his own future. Now, is that a way of saying, step down now and a year from now, maybe you'll be ambassador to a trade conference in Italy; but if you stay, we can't promise this won't get messy?
WILLIAMS: That's exactly right, Scott. I can see you know how to read tea leaves. That was a nice way of saying…
SIMON: Chicago tea leaves, at any rate.
(Soundbite of laughter)
WILLIAMS: Absolutely. You know, it was a nice way of saying, you do not have my support in any way. And then yesterday, Governor Pat Quinn, the Democratic governor of Illinois, said that - outright - that Burris should resign. And if you notice, again, tea leaves coming from the black community in Chicago, which had at one point said, oh yeah, you need a black senator and, you know, Roland Burris is a nice guy, what's wrong with him?
You know, all of a sudden, they're so silent. They're not heard in any voice - they're not voicing any support for him at all.
SIMON: So he may not last?
(Soundbite of laughter)
WILLIAMS: Well, we'll see how much ego - he has a lot of ego - but he will not be effective.
SIMON: Okay. Thanks so much. NPR News analyst Juan Williams, and of course, Joe Nocera, our friend from the business world and New York Times columnist. Thank you both very much for joining us this morning.
WILLIAMS: You're welcome.
Mr. NOCERA: Thank you.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.