Obama Offers Plan To Revive Economy President-elect Barack Obama put forward an economic stimulus plan on Saturday that calls for the creation of new jobs through expanded highway construction programs and development of solar energy use.
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Obama Offers Plan To Revive Economy

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Obama Offers Plan To Revive Economy

Obama Offers Plan To Revive Economy

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From NPR News, it's All Things Considered. I'm Andrea Seabrook. Today, President-elect Barack Obama plotted the course he hopes will guide the country through the economic storm. Step one, unveiled in his weekly radio and web address, an ambitious economic stimulus package.

His team on that journey is coming into focus, Federal Reserve official Timothy Geithner as treasury secretary, New Mexico Governor Bill Richardson as commerce secretary. And today, the president-elect officially named his White House press secretary. It's his long-time spokesman Robert Gibbs. In today's address, the president-elect issued a stern warning about the economy. Things will probably get worse before they get better. NPR's Tamara Keith has more.

TAMARA KEITH: Mr. Obama said he has directed his economic team to come up with a plan to create 2.5 million jobs by January 2011.

President-elect BARACK OBAMA: We'll be working out the details in the weeks ahead, but it will be a two-year nationwide effort to jump-start job creation in America and lay the foundation for a strong and growing economy.

KEITH: Up until now, most talk of an economic stimulus package has had a one-year time frame. Mr. Obama describes his longer two-year approach as a plan big enough to meet the challenges the nation faces. Those challenges, he noted, include 1.2 million jobs lost this year and the risk of millions more next year.

President-elect OBAMA: We'll put people back to work, rebuilding our crumbling roads and bridges, modernizing schools that are failing our children, and building wind farms and solar panels, fuel-efficient cars and the alternative energy technologies that can free us from our dependence on foreign oil and keep our economy competitive in the years ahead.

KEITH: Business and economics historian John Steele Gordon says the discussion of infrastructure investments in government programs rings familiar.

Mr. JOHN STEELE GORDON (Author, Business and Economics History): That's the standard remedy for this illness. That whether it's the best remedy or not is another question.

KEITH: Gordon argues it isn't. He says the New Deal didn't end the Great Depression, World War II did. He says building bridges and painting schools won't provide a quick fix.

Mr. GORDON: That's all very good, but that's - you can't start that on January 21st, even if Congress agreed. It's going to take a long while to plan it and decide who gets what and where and how and when.

KEITH: Economist Lakshman Achuthan agrees that government-funded job creation alone won't solve the problem. Achuthan is director of the Economic Cycle Research Institute, and as he sees it, there are two other elements - extending jobless benefits, which Congress just did, and some sort of direct economic stimulus.

Mr. LAKSHMAN ACHUTHAN (Managing Director, Economic Cycle Research Institute): Rebate checks or food stamps or payroll tax holidays or tax breaks for specific businesses, whatever. The content is less important than the timing.

KEITH: Case in point, the economic stimulus package passed by Congress last February.

Mr. ACHUTHAN: A $150 billion was spent earlier this year, and what we ended up with was a rapidly deteriorating economy and financial market. It didn't help at all.

KEITH: Achuthan says, since the economy was already going down, the money got lost in the economic storm. Instead of buying stuff, most people put their stimulus checks in savings for a rainy day or paid off credit card debt. Congress and Mr. Obama should agree on an economic stimulus package, but he says the money shouldn't go out until the economy takes an upward turn.

Mr. ACHUTHAN: It's just like when you're pushing a swing. You don't push a swing at any time when it's going back and forth. You push the swing at one time, and it's a very smooth ride and a strong swing upwards. And that is, ultimately, what we will need if we want to create jobs.

KEITH: Atchuthan says the recoveries from the recessions in 1991 and 2001 were soft, so-called jobless recoveries. This time, he says, a rapid bounce back is needed, and a properly applied push from an economic stimulus could make that happen. The timing can be tricky and as Atchuthan says, there's a big chance it won't work, but then neither did the last economic stimulus. Tamara Keith, NPR News, Washington.

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