The First 100 Days of the Obama Economy

WASHINGTON - The first thing the White House wants you to know about assessments of a president's first hundred days is that those assessments don't matter.

“It’s the journalistic equivalent of a Hallmark holiday," a senior administration official said. "They don't mean anything but you have to observe them."

Yet advisers are only too happy to tick off a flurry of accomplishments on the economy in the administration’s first hundred days — a mix of old-fashioned palliative measures, such as increased jobless and health insurance benefits for struggling Americans, to a series of sophisticated correctives for the faltering financial system.

Among the most significant steps in the first hundred days:

  • passage of a $787 billion recovery plan;
  • the release of the second tranche of TARP funding — an additional $350 billion — for troubled banks;
  • a public-private partnership to rid banks of toxic assets on their balance sheets;
  • so-called “stress tests” on major financial institutions;
  • a $275 billion housing program estimated to rescue as many as 9 million homeowners from foreclosure;
  • a proposal for major overhaul of the financial regulatory system.

The president also has called for limits on executive pay; ordered the firing of General Motors chief Rick Wagoner as part of the restructuring of the auto industry; and taken credit card executives to task for raising interest rates and fees in the midst of a recession.

Aides say the president’s first hundred days have been as productive as any since Franklin Delano Roosevelt.

High Stakes
The financial crisis is the defining challenge of Barack Obama’s presidency and he knows it.

In an early signal of the issue’s importance, the president instituted the “economic daily briefing” — a meeting with top economic advisers in the Oval Office modeled after the daily national security briefings he receives.

Famous for his even temperament, the president's mood has darkened, aides say, in only a few instances since taking office: in his dealings with military families who've lost loved ones, and when reading some of the personal letters from Americans telling stories of their own economic turmoil.

Nor has the president shied away from articulating his own political stakes.

"I'm not going to make any excuses," he told a town hall audience in Fort Myers, Florida on Feb. 10. "If stuff hasn't worked and people don't feel like I've led the country in the right direction, then you'll have a new president."

Hitting the Right Note
Early on, the president struggled to find the proper tone in discussing the economy. Faced with a financial system in freefall, and the task of convincing Congress his massive recovery plan was necessary, in the first weeks the president spoke in grim terms, at one point going so far as to suggest the financial crisis could be irreversible if his stimulus plan weren’t enacted.

That led to concerns Obama’s foreboding tone was exacerbating the confidence crisis on Wall Street and among consumers — a criticism crystallized by former President Bill Clinton in a February television interview.

"I like the fact that he didn't come in and give us a bunch of happy talk. I'm glad he shot straight with us," Clinton said. "I just would like him to end by saying that he is hopeful and completely convinced we're gonna come through this."

At the same time, the president had to manage the fury many Americans feel over bailouts of Wall Street, while recognizing he may well need to ask Congress for additional funding to shore up banks in the future.

Public anger reached a boil last month when news broke that the insurance company AIG paid $165 million in bonuses to the very financial division executives blamed for running the company into the ground. “I don’t want to quell anger; I think people have a right to be angry,” Obama said on March 19.

At an Oval Office meeting with CEOs of the nation’s top financial institutions, the president told top executives his administration was the only thing standing between them and “the pitchforks” of an angry public.

In recent weeks, the president has been striking a more hopeful, if cautious, tone on the economy, while advisers point to “green shoots” of progress: a surge in home refinancings, some loosening of credit, signs of resurgence in the retail sector.

“There is no doubt that times are still tough. By no means are we out of the woods just yet,” the president said in mid-April in an economic address at Georgetown University.

“But from where we stand, for the very first time, we're beginning to see glimmers of hope. And beyond that, way off in the distance, we can see a vision of an America's future that is far different than our troubled economic past.”

The Next Hundred Days
The next 100 days may be even more significant than the first.

The president’s signature middle class tax cuts are just now getting into the system; the next few months will reveal whether they’ve worked to stimulate demand. Billions in recovery act funds should start to flow into the economy. And in the coming months, the Treasury Department is likely to hold the first auctions to purchase banks’ bad assets. The success — or failure — of that effort will be crucial and telling.

"The moment of truth is at hand," said Mark Zandi, an economist with Moody’s, who has advised the Obama administration.

"We should see some benefit [from the administration’s policies] in next 100 days. If we don’t, policymakers have to think about plan B — quickly."

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