Economic Team Banking on Confidence
The stimulus spigot is opening, the plan to save some homes from foreclosure is in place and the proposal to salvage financial system is nearly so. Now comes the real work -- persuading America that the trillion plus dollars being shoveled out of the Beltway will actually begin setting things right. And government officials are setting off to do it with a vengeance.
Larry Summers, President Obama's top economic adviser, echoed FDR Friday during a well-publicized and closely watched speech at the Brookings Institution by saying, "In the past few years, we've seen too much greed and too little fear; too much spending and not enough saving; too much borrowing and not enough worrying. Today, however, our problem is exactly the opposite." On Sunday Fed Chairman Ben Bernanke appears on CBS' 60 Minutes in his first TV interview since taking the job three years ago -- an unusual bit of prime-time cheerleading for a fed chief rare enough for CBS to claim it was the first television interview in 20 years. Earlier in the week, Treasury Secretary Timothy Geithner -- who must be getting a little camera shy since the markets seem to tank every time his words fly across the airwaves -- sat down with PBS' Charlie Rose.
The president himself is also working to calm things down a bit, warning against interpreting the rise and fall of the stock market as a referendum on his policies and meeting with members of the Business Roundtable to soothe their nerves and seek their cooperation.
And count on seeing a lot more of Obama and his economic masterminds -- a lot more. After all, unless investors feel like its safe to begin wading back into the markets, consumers think they can loosen their grips on their wallets and businesses start ordering parts and supplies, the government's efforts are for naught. The condition of the American psyche is nearly as important to economic well being as a healthy banking system.
That said, inspiration and confidence-building will only go so far -- in fact it will rapidly turn into despair if the the various efforts prove anemic and the economy continues faltering.