President-Elect Obama has spent considerable time since Election Day trying to lower the unrealistically high expectations of his supporters, but this is about as stark as he’s been:
CHICAGO – The economic recession will get significantly worse before it starts to improve, President-elect Barack Obama said, seeking in an interview broadcast Sunday to tamp down expectations as he prepares to assume the presidency in 44 days.
“If you look at the unemployment numbers … the fragility of the financial system and the fact that it’s an international system,” the recession “is a big problem, and it’s going to get worse,” Obama told NBC News’ Tom Brokaw on Saturday. The interview aired Sunday on NBC’s “Meet the Press.”
Acknowledging that his agenda had changed sharply just in the month since he was elected, Obama said passing a short-term economic stimulus package was now his top priority.
“We’ve got to provide a blood infusion right now, make sure that the patient is stabilized,” he said, adding that the budget deficit, by some estimates more than $1 trillion, would have to be put on the back burner “for now.”
“We’ve got to get the economy moving,” he said.
The political implications of all this will be interesting to watch.
Barack Obama faces a situation as he takes office that’s very similar to the one Ronald Reagan faced in 1981. Then, as now, the nation was in the middle of a deep recession that was caused factors mostly beyond the direct control of the government. Thanks to his own persuasive powers, Reagan managed to get a tax package through Congress designed to stimulate economic growth. That, combined with the inflation-busting monetary policies that Paul Volcker had been implementing since 1979, was eventually enough to turn things around lead to one of the longest peacetime economic expansions in American history.
But it wasn’t always a sure thing.
The economy got worse in the first 2 years of the Reagan Administration before it even started showing signs of getting better, and Republicans paid for it in the 1982 mid-term elections, when Republicans lost 26 seats in the House of Representatives.
Does Obama face a similar risk ? Only time will tell.
