MICHELE NORRIS, host:
And now from the week on Wall Street to the week in Washington, where the chief concern is, no surprise here, Wall Street and the economy. And we're joined by two of our regular political analysts, E.J. Dionne of the Brookings Institution and The Washington Post, and Matthew Continetti of The Weekly Standard. Glad to have both of you here in the studio.
E.J. DIONNE (Political Analyst, Brookings Institution, The Washington Post): Thank you.
MATTHEW CONTINETTI (Political Analyst, The Weekly Standard): Thank you.
NORRIS: Now, we just heard about glimmers of hope in the economy this week, as Roben Farzad described it, cold comfort. But does that take any pressure off of President Obama? And E.J., I'm going to talk about you.
DIONNE: It's amazing how a four-day win streak on the market can affect all of the commentary. You'd - almost thought we are back to the days when Pets.com was hot and the - our biggest problem was a surplus. I mean, suddenly, Obama went from he's doing too much, to a lot of his critics saying, well, that was a pretty good education speech or let's argue about stem cell research.
And you have Larry Summers out there today saying, you know, Americans, this has stabilized, go out there and grab all those bargains in the store. Now, the problems haven't gone away.
NORRIS: Right. They're trying to build a confidence.
DIONNE: He's still got to come up with a banking plan. Geithner was on the Hill earlier on the week, Secretary of the Treasury Geithner trying to sell his plans. And I was told that a lot of Democrats of Congress heard it as, trust me on this. So there's still a long way to go. But the - it is - it shows how fickle commentary can be. I shouldn't say that doing commentary here.
NORRIS: But let's…
DIONNE: When it can be so affected by a few good days.
NORRIS: Let's test that by going to Matthew because E.J. is saying that some of the critics are saying it's okay to talk about education and stem cells. Is that the case? Or are people still criticizing Barack Obama for trying to do too much for crowding out that core message that he's really most concerned about the thing - that people are most concerned about the economy?
CONTINETTI: Well, you can't blame a guy for trying. And we've heard from Rahm Emanuel, who's Chief of Staff, and Secretary of State Clinton even, that a crisis is a terrible opportunity to waste. And so, the Obama administration needs to deal with a financial crisis in a way that they really haven't yet had this detailed plan that actually gets rid of these trouble assets that are bringing down the banking system - that are the root of our economic malaise.
They also wanted - have all these grand plans for education reform, for new energy subsidies and for health care reform. What's interesting to me, though, is that it seems these two priorities - the economic crisis on the one hand and the budget efforts on the other - are kind of beginning to run against each other.
And what we saw when Geithner went to the Hill yesterday to talk about the Obama budget, a lot of Senators, including some Democrats, like Kent Conrad, were fairly skeptical. They were - they brought up questions like, well, do we really want to impose a cap on carbon emissions at a time of economic downturn or in health care, which in the Obama budget is listed as TBD - to be determined? Are we really ready for all these grand reforms that may cost more money then they'll save in the long run?
NORRIS: Now, when we when talk about the economy, I'm curious about a very simple question, is this Barack Obama's economy now? Or can he say, listen, this is the economy that I inherited from the other guy?
DIONNE: I think it's - he can still say it's the economy he inherited from the other guy. I was thinking before you saw this precipitous drop in the market and the terrible news on unemployment that he had quite a bit of time. And I've decided the real equation for him is not just time, but time times the acceleration downward.
If you can have some sort of floor on the market, have it come up, have unemployment stabilized, then I do think he'll be able to say this mess is Bush's fault. If the thing gets worse and worse and worse, if he returned to the news of last week, then I think he would have less time. I think there is one substantive way in which this week's news may affect things.
The administration believes, I think, that the banks may not be insolvent in the long run, as long as you don't take those bad assets and value them as they are now. If the economy starts coming back up, those assets will rise in value and perhaps the dangers to the banks won't be as great. That's a kind of rosy scenario, but it's the one they're hoping works out.
NORRIS: Is this a timeline, Matthew, that you see on the horizon?
CONTINETTI: Well, I see that the timeline on the horizon being that Obama will continue to be able to show that this was George Bush's economy, and the polls reflect that, too. Most people think that this was a Republican problem that is now affecting us all, even though the Democrats are in charge. But four years from now, I don't think that's necessarily going to be the case.
And so Obama's chances then will be determined by, you know, the realities and opinions there. I will say this, though. You know, Franklin Roosevelt, to go back to history, he had mixed success reinvigorating the American economy. But what he did have was great political success in creating majorities and getting his program through.
And I think a lot of Obama's future will be determined, not necessarily even by what he does for the economy, but what he does politically. And that's why I think there's another reason for Obama, that he needs to get through these programs that he stakes so much on - things like cap-and-trade, things like health care reform this year.
NORRIS: Just quickly, E.J., we only have a few seconds, but when he starts to face criticism from people like him Kent Conrad, within his own party, how damaging is that for him as he tries to build confidence in the economy? Very quickly.
DIONNE: If he runs into a lot of conservative Democratic opposition, particularly moderate to conservative opposition, particularly on health care, I think they're prepared to compromise on cap-and-trade. He's got to get a health care plan through.
NORRIS: Thanks to both of you.
CONTINETTI: Thank you.
DIONNE: Thank you.
NORRIS: That's E.J. Dionne of the Brookings Institution and The Washington Post. And Matthew Continetti of The Weekly Standard.
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