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22.09.09

Obama pushes economic message before big summits

NEW YORK. President Barack Obama's multi-tasking abilities will be tested this week as he juggles war, diplomacy and finance on the world stage while dealing with the American public's top concern: the U.S. economy.

As he prepares for three days of meetings at the United Nations followed by a two-day global financial summit in Pittsburgh, Obama seems determined not to let up on his drive to reassure his domestic audience about his handling of issues at home such as the economy and healthcare.

Before going to New York City for the U.N. meetings, Obama visited Troy, a community 140 miles north, on Monday to tell middle-class families he was well aware of the toll that global competition and boom-bust cycles have taken on their efforts to earn a living.

Contraction in the manufacturing sector has caused "many years of hard times" for local families, Obama said during a visit to a community college.

"Communities like this one were once the heart of America's manufacturing strength," he said. "But over the last few decades, you've borne the brunt of a changing economy which has seen many manufacturing plants close in the face of global competition."

Obama later discussed the economy before a wider audience, when he became the first sitting president to appear on CBS' television's "Late Show with David Letterman."

At the United Nations, Obama will delve into issues like Middle East peace, the strategy for the Afghanistan war and nuclear non-proliferation.

The agenda at the summit of the Group of 20 big economies in Pittsburgh will focus on overhauling global financial regulation and fixing long-term imbalances in the world economy.

Those agenda items are high priorities for Obama, but his schedule this week reflects a recognition that jobs, the costs of college tuition and other pocketbook issues are paramount for the U.S. public.

Obama has been struggling to push up his approval ratings, which have tumbled amid a rancorous debate on his plan for healthcare reform and accusations by critics that his policies would lead to too much government meddling in the economy.

The Letterman show mixed comedy with weightier issues.

Asked about former President Jimmy Carter's comment that some of the sharp criticisms aimed at Obama seemed to reflect racism, Obama deadpanned, "I think it's important to realize that I was actually black before the election."

On the economy, Obama offered a cautious prognosis.

"It is improving. We've seen some stabilizing, the financial markets aren't in meltdown. But we are not out of the woods yet," he said.

White House officials have indicated frustration that Obama is not getting more credit for helping to pull financial markets back from the brink and stabilizing the U.S. economy, which was in freefall when he took office in January.

But Obama has acknowledged that even though the economy is showing signs of improvement, the U.S. unemployment rate -- now at 9.7 percent -- could stay uncomfortably high for some time.

"I want to be clear, that probably the jobs picture is not going to improve considerably -- and it could even get a little bit worse -- over the next couple of months," Obama told CNN on Sunday as part of television media blitz that, like the New York appearances, was aimed squarely at a domestic audience.

In Troy, Obama sounded a populist note by taking aim at big U.S. banks -- many of which received money from the government's $700 billion bailout program -- but which are lobbying against a proposed overhaul of the federal student loan program.

Obama said the banks want to keep the current program in place because it gives them an "unwarranted subsidy." He said it was a "no brainer" to end the subsidy.

He is likely to continue that theme at the G20, where leaders are considering ways to rein in bank bonuses that many say contributed to the global financial crisis by encouraging excessive risk-taking.

Bank bonuses are part of the G20 agenda to consider ways to reshape global financial rules after the 2008-2009 crisis.

Simon Johnson, a former chief economist at the International Monetary Fund, said the G20 may accomplish little of substance on that front because neither U.S. nor European officials are offering much in the way of bold regulatory proposals.

"There is a conspiracy of silence here," Johnson said.

"The point of the meetings is to try to reassure themselves and everyone that they're broadly on track and have a round of applause and some back patting and so on," he added.

By Caren Bohan

Source: Reuters

Post-Crisis World Institute