Sizing Up Obama's Economic Philosophy Last week, President Obama signed a $410 billion spending bill, which will contribute to a projected record deficit of $1.7 trillion. The omnibus spending bill comes as the president pledges to balance the budget and lawmakers grapple with the best way to solve the nation's economic crisis. Tony Cox speaks with Keith Reed and Dr. Julianne Malveaux.
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Sizing Up Obama's Economic Philosophy

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Sizing Up Obama's Economic Philosophy

Sizing Up Obama's Economic Philosophy

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TONY COX, host:

From NPR News, this is News & Notes. I'm Tony Cox. Last week, President Obama signed a $410 billion spending bill that adds to the ongoing debate over the best way to cure the nation's economic crisis. It will contribute to a projected record deficit of $1.7 trillion. That's trillion with a T. Congress is grappling with it and the so-called earmarks that are a long-standing part of the way the federal government spends taxpayer dollars. All this as the president has also promised to balance the budget. For a closer examination, we have our two economics contributors: Keith Reed, who blogs at keithreedsmoneycorner.com, and author and economist Dr. Julianne Malveaux. Keith, Dr. Malveaux, nice to have you both.

Dr. JULIANNE MALVEAUX: Good to be here.

KEITH REED: Thank you.

COX: Let's start with this. How different would you say, both of you - and I'll start with you, Dr. Malveaux - how different are President Obama's economic policies from those of the former President Bush? And how much of Obama's direction can be directly attributed to the economic crisis?

Dr. MALVEAUX: Well, prior to our economic downturn that was made very visible by Treasury Secretary - former Treasury Secretary Henry Paulson's little three-page memo in September, President Obama, then candidate Obama, had been clear that he did favor more government involvement in the economy than Mr. Bush ever did. Indeed, I think that one of the reasons the American people turned to President Obama was because of the ways that he felt government can make a difference in the outcomes that the economy was delivering. Mr. Bush, on the other hand, was very hands-off. His middle name was tax cut. He did not - the word, poor, never escaped his lips and he really looked at if he give people money, they'll make good decisions. Well, that may well be true, but the fact is many people have decided that there are some things they want government to provide. There are things like public services. So I think you got the very typical dichotomy between Democratic and Republican approaches to the economy. Democrats tend to want a more activist government. Republicans tend to want the government to be more hands-off. And the differences between Mr. Bush and President Obama can certainly be encapsulated that way. But to fast-forward it, this economic exigency has made it all the more important that President Obama move very quickly. Very few presidents have been able to move successfully this quickly. Legislation is frequently proposed, but often not approved in such a short time.

COX: Well, Keith, let me ask you. From the standpoint of the new president, was the economic crisis an opportunity to act or an obligation to act?

REED: It was both. I think if you heard Rahm Emanuel's oft-quoted commentary this week that you never waste a crisis, and people have been beating the Obama administration up all week about this. But you know, to be honest, it was both opportunity and obligation. Of course, as the president of United States at a time of crisis, you do absolutely, positively have the obligation and a responsibility to your constituency, the American people, to take some action, and whether that's in an instance of national defense or whether that's in an instance of economic tumult, you've got to do that. President Obama had no choice but to take swift action, and whether or not you agree on the action that he's taken is immaterial to the fact that he really had no choice but to do something about what's going on in the economy.

In terms of it being an opportunity, I mean, listen, you know, the Bush administration people - many people on the right, many people in general - have forgotten in this conversation over what Obama is doing that the Bush administration used 9/11 as the opportunity to advance its priorities on national security, on homeland security, on what many people considered to be, you know, government secrecy, you know, those sorts of things. There are many things that happen in the economic world and in the political world and in our daily lives that give presidents the opportunity to advance some part of their agenda. They become - you know, world events or national events become the trigger for some piece of legislation or some broader priority. In this instance, the Obama administration had the opportunity coming in to expend some of its political capital on some of the things that he always said that he wanted to do. Reforming health care is one of those things. You know, President Obama has always said that he believed that fixing - that the long-term strength of the American economy was tied to what's happening with health care and decreasing costs to individuals and decreasing - increasing the number of people that have health-care coverage. With the economic crisis, it should be no surprise that he's using some of his political capital to advance that agenda.

COX: You know, this is going to be our last segment together, doing the economics that we do generally on every Monday, as our show comes to an end after this week. So I'd like to ask both of you, as economists, to talk a little more personally with us about some things. Since our show targets an African-American audience largely, do you think that they are paying close attention to what's going on in the economy, Dr. Malveaux?

Dr. MALVEAUX: You know, Tony, I'm going to miss News & Notes. One of the things I've enjoyed so much about it has been the way that we've been able to take some time, you know, a good 10 minutes on most of our Monday shows, to put some teeth into the way these macro-stories hit our community. The majority media really doesn't pay attention to that. Let me give you an example. Last week, of course, we got the numbers that the unemployment rate was 8.1 percent overall, which, of course, meant about 13 percent for African-Americans. And if you looked at the Bureau of Labor statistics report, you found that the adjusted unemployment rate, including those who are part time and, you know, want to be full time and those who dropped out, look something more like 15.5 percent. Well, do you know what that number is for African-Americans?

COX: No.

Dr. MALVEAUX: I sat down and calculated 24.4 percent. What that means is one in four African-American people who wants to work doesn't have a job. These are Depression-level rates. Well, once I'd calculated it for something, a talk I was doing, and talked about it and then went around and just tried to figure, well, who talks about this? Well, the only place I knew that I would get an open ear was News & Notes. So where are we going to talk about those kinds of things? The fact is that our community needs to pay more attention. We need to demand better news. We not only need to talk about how all these things - the stimulus package, you know, the new budget - affect our communities, we need to be activists. Because while President Obama certainly has put forward a somewhat progressive agenda, the African-American agenda will not be met unless we make demands. There are a whole set of things. We can talk about the way the economy has skewed the ways that we live, especially in the past year or so. One in four people out of work certainly is a skewing. And you know, as president of Bennett College for Women, that oasis where we educate and celebrate women, I see parents who've gone bankrupt, parents who've lost jobs and are now struggling with how they deal with issues of tuition and other things, dreams and hopes they had for their daughters that they're now not going to be able to deal with. So part of the challenge that we must also deal with is that of financial literacy, what we can do even in a bad economy to make sure that we're better off than we have to be.

COX: What about that financial literacy within the black community, Keith Reed? How would you describe it - good, bad, what?

Mr. REED: I think it's lacking, and I think that that is - or I know that that's one of the reasons why I love doing News & Notes. I dare say that a hallmark, or one of the most important things in my career as a business reporter has been that I've been very interested in writing specifically, when I had the opportunity, about financial literacy and about broader economic topics as they relate to the African-American community. It is absolutely an imperative that in our community, where so many of the economic trends just have a greater and unfortunately, a more negative at times, a more devastating impact, that we have to discuss these issues. You know, I make it a point to - whenever I'm asked by a group ,especially to speak to an African-American audience, about the economy or about a story that I've written or about financial literacy, I've done it. I've blogged about financial literacy and economic topics for the African-American community. This is just not something that we can afford to miss.

I want to take a step back, if I can, and talk about what's going on just in business journalism right now. There was a topic on a listserv of journalists just this morning about, you know, this back and forth going on between CNBC and John Stewart on Comedy Central. And so when asked the question of, you know, whether journalists, whether business journalists were being held to full account about what happened - and the point that I made when I posted my response was that, you know, to a certain extent, I believe on business desks across the country, we could have been - I don't know that any of us could have seen what was coming because some of the, you know, much of what happened in the economy with these derivative schemes and credit default swaps was just unforeseeable. There is no way any journalist or most journalists could have seen this coming. But I do believe, and it's been my experience, that having some diversity of voice and talking about the subject will make you more skeptical. I mean, you know, I've lived in lower-income neighborhoods for a lot of my life. I lived in majority African-American neighborhoods for a lot of my life. And I know that people who - the people who I grew with and who have had that experience look at much of what's happening in this economy, you know, where people were running out and buying big houses and they were saying, these bankers - you know, I remember my mother saying to me, these bankers are swindlers. I remember in 1990 or 1987, or whenever it was when I bought my house, that they tried to get me into one of these funny loans and I told them no. And they thought I was stupid because I was black and she got, you know, bobbing and weaving with hers...

COX: I understand.

Dr. MALVEAUX: You know, let me just jump in and correct you for a moment about those business journalists who didn't see it. Maybe I'm not a business journalist, but I'm been calling this one for about 10 years.

COX: A number of you did. Let me just say, our time has run out and you know, what I find interesting, and first of all, I want to thank both of you for participating and making our economic segment what it was. We spent, as a community, a number of years trying to integrate as far as voting is concerned, getting equal rights there, housing, education. There has not been as much attention paid to trying to level the playing field when it comes to the economy and understanding dollars and having literacy in the black community, and both of you have contributed to that. And we want to thank you on behalf of News & Notes. And it's been a pleasure. We will see you again.

Dr. MALVEAUX: Well, thank you, and thank you for the work you've done, Tony. It has been a delight working with you.

COX: My pleasure. That was author and economist Dr. Julianne Malveaux. She is also the president of Bennett College for Women in Greensboro, North Carolina. And Keith Reed has been our regular economics contributor. You can find more of his financial wisdom online at keithreedsmoneycorner.com. He joined from the studios of WCPN in Cleveland, Ohio.

COX: In this final week of our show, we are featuring thoughts and remembrances from some of our News & Notes contributors. Take a listen.

Congressman JIM CLYBURN (Democrat, South Carolina): This is Congressman Jim Clyburn of South Carolina, the House majority whip. I've always enjoyed News & Notes, and I always saw them as a reference for those issues of real importance to my constituents and the communities that I served.

COX: This is NPR News.

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