Obama strikes more upbeat note
Turning more upbeat, President Barack Obama said last March 13 that his administration is working to create a "post-bubble" model for solid economic growth once the recession ends. He said that means the days of overheated housing markets and "people maxing out on their credit cards" are over.
But first, Obama said, "We've got to get through this difficult period."
There are "modestly encouraging signs" on that score, said Lawrence Summers, Obama's top economic adviser, citing indications that consumer spending had stabilized after taking a dive over the holiday season.
The more buoyant White House tone matched a fourth straight day of market gains. Dow Jones industrials gained 53.92 points to cap Wall Street's best week since November.
Administration officials were criticized earlier this year for painting too dark a picture of the economy in an effort to win congressional passage of the president's $787billion stimulus package. But more recently, the president and others on his team have tempered their comments in hopes of building confidence, including the president's suggestion last week that it was a good time for those with a long-term perspective to buy stocks.
Despite the new enthusiasm at the White House and on Wall Street, there was little solid evidence to suggest an end was in sight to the severe recession that has already cost the U.S. more than 4million jobs, driven home values down and sent foreclosures soaring.
And there were fresh signs of financial stress. The Commerce Department reported yesterday that the U.S. trade deficit plunged in January to the lowest level in six years as the economic downturn cut America's demand for imported goods.
And China's premier, Wen Jiabao, expressed concern over the U.S. economy and the value of his nation's vast holdings in Treasury bonds. China is Washington's biggest foreign creditor, holding an estimated $1 trillion in U.S. government debt.
"We have lent a huge amount of money to the U.S., so of course, we are concerned about the safety of our assets," Wen told reporters in Beijing.
But in Washington, Summers said it was time for America to move past an "excess of fear" that has made things worse.
Summers, who was treasury secretary under President Bill Clinton and now is director of Obama's National Economic Council, said it was too soon to gauge the broad impact of the administration's recovery program or to predict when the recession might end. But he suggested glimmers of hope.
Speaking at a Brookings Institution forum, he was asked by a member of the audience what the nation's business community could do to help speed the recovery.
"What we need today is more optimism and more confidence," Summers said.
He called it a "very good moment" to make investments in new construction and other projects. "There are a very large number of things that are on sale today."
Private economists agree that it's too soon to declare recovery is on the way.
"As long as we are losing over 600,000 jobs per month, consumers are not going to be able to sustain consumer spending," said Mark Zandi, chief economist at Moody's Economy.com. "It is too early to conclude that the bottom is at hand," he said after Thursday's report on retail sales and consumer spending.
The White House has been on a weeklong campaign to promote the president's economic recovery and financial stability plans while giving a more upbeat assessment of the economy's ability to rebound. Obama economic adviser Christina Romer delivered a speech along the same themes earlier in the week.
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