On April 14, President Obama gave
a speech at Georgetown
University, trying to explain why he was taking on so many
economic issues so early in his administration. He argued that the
country needed to break its bubble-and-bust cycle and cited the New
Testament in calling for a new economic foundation for the nation.
This foundation would be built on better schools, alternative
energy, more affordable health care and a more regulated Wall
Street, he said. Later that afternoon (shortly before the Obama
family introduced its new dog, Bo, on the South Lawn of the White
House), I sat down with the president to talk about how his agenda
might change daily life in this country.
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Nadav Kander for The New York Times
President Barack Obama during an interview in
the Oval Office on April 14.
Nadav Kander for The New York Times
Power Point President Obama and
The Times's David Leonhardt during the interview.
Nadav Kander for The New York Times
This was our third interview about the economy, the first two
occurring during last year’s campaign. And while the setting was
decidedly more formal this time — the Oval Office — the interview
felt as conversational as those earlier ones. We sat at the far end
of the office from his desk and spoke for 50 minutes. None of his
economic advisers were there. As the conversation progressed, Obama
spoke in increasingly personal terms. What follows is a lightly
edited transcript of that interview.
At the end of our conversation, when I asked him if he was
reading anything good, he said he had become sick enough of
briefing books to begin reading a novel in the evenings —
“Netherland,” by Joseph O’Neill.
I. The Future of Finance
Q: The idea here
is to look beyond the current moment and try to think about what
American life is going to be like on the other side of the
so-called Great Recession. And so I thought it might make sense to
start where the trouble started — finance. People who want to get a
sense for how you think about education and jobs and all sorts of
other issues can get a really good sense for your thinking by
reading “The Audacity of Hope,” or by reading your old speeches,
where you basically lay out your learning curve. But there’s no
chapter on finance in “The Audacity of Hope.” And so I wonder if
you would be willing to describe a little bit of your learning
curve about finance, and what you envision finance being in
tomorrow’s economy: Does it need to be smaller? Will it inevitably
be smaller?
THE PRESIDENT: Well, first of all, I
think that we should distinguish between finance as the lifeblood
of our economy and finance as a significant industry where we have
a comparative advantage — right? So in terms of just growing our
economy, we’ve got to have enough credit out there to fund
businesses, large and small, to allow consumers the flexibility to
make long-term purchases like cars or homes. So that’s not going to
change. And I would be concerned if our credit market shrunk in
ways that did not allow for the financing of long-term growth.
What that means is not only do we have to have a healthy banking
sector, but we’re going to have to figure out what we do with the
nonbanking sector that was providing almost half of our credit out
there. And we’re going to have to determine whether or not as a
consequence of some of the steps that the Fed has been taking, the
Treasury
has been taking, that we see the market for securitized products
restored.
I’m optimistic that ultimately we’re going to be able to get
that part of the financial sector going again, but it could take
some time to regain confidence and trust.
What I think will change, what I think was an aberration, was a
situation where corporate profits in the financial sector were such
a heavy part of our overall profitability over the last decade.
That I think will change. And so part of that has to do with the
effects of regulation that will inhibit some of the massive
leveraging and the massive risk-taking that had become so
common.
Now, in some ways, I think it’s important to understand that
some of that wealth was illusory in the first place.
So we won’t miss it?
THE PRESIDENT: We will miss it in the
sense that as a consequence of 25-year-olds getting million-dollar
bonuses, they were willing to pay $100 for a steak dinner and that
waiter was getting the kinds of tips that would make a college
professor envious. And so some of the dynamic of the financial
sector will have some trickle-down effects, particularly in a place
like Manhattan.
But I actually think that there was always an unsustainable feel
about what had happened on Wall Street over the last 10, 15 years,
and it’s not that different from the unsustainable nature of what
was happening during the dot-com boom, where people in Silicon
Valley could make enormous sums of money, even though what they
were peddling never really had any signs it would ever make a
profit.
That doesn’t mean, though, that Silicon Valley is still not a
huge, critical, important part of our economy, and Wall Street will
remain a big, important part of our economy, just as it was in the
’70s and the ’80s. It just won’t be half of our economy. And that
means that more talent, more resources will be going to other
sectors of the economy. And I actually think that’s healthy. We
don’t want every single college grad with mathematical aptitude to
become a derivatives trader. We
want some of them to go into engineering, and we want some of them
to be going into computer design.
And so I think what you’ll see is some shift, but I don’t think
that we will lose the enormous advantages that come from
transparency, openness, the reliability of our markets. If
anything, a more vigorous regulatory regime, I think, will help
restore confidence, and you’re still going to see a lot of global
capital wanting to park itself in the United States.
Are there tangible ways that Wall Street
has made the average person’s life better in the way that Silicon
Valley has?
THE PRESIDENT: Well, I think that some
of the democratization of finance is actually beneficial if
properly regulated. So the fact that large numbers of people could
participate in the equity markets in ways that they could not
previously — and for much lower costs than they used to be able to
participate — I think is important.
Now, the fact that we had such poor regulation means — in some
of these markets, particularly around the securitized mortgages —
means that the pain has been democratized as well. And that’s a
problem. But I think that overall there are ways in which people
have been able to participate in our stock markets and our
financial markets that are potentially healthy. Again, what you
have to have, though, is an updating of the regulatory regimes
comparable to what we did in the 1930s, when there were rules that
were put in place that gave investors a little more assurance that
they knew what they were buying.
There was this great debate among F.D.R.’s
advisers about whether you had to split up companies — not just
banks — you had to split up companies in order to regulate them
effectively, or whether it was possible to have big, huge,
sprawling, powerful companies — even not just possible, but better
— and then have strong regulators. And it seems to me there’s an
analogy of that debate now. Which is, do you think it is O.K. to
have these “supermarkets” regulated by strong regulators actually
trying to regulate, or do we need some very different modern
version of Glass-Steagall,
(1)
THE PRESIDENT: You know, I’ve looked
at the evidence so far that indicates that other countries that
have not seen some of the problems in their financial markets that
we have nevertheless don’t separate between investment banks and
commercial banks, for example. They have a “supermarket” model that
they’ve got strong regulation of.
Like Canada?
THE PRESIDENT: Canada being a good
example. (2) And they’ve actually done a good job
in managing through what was a pretty risky period in the financial
markets.
So — that doesn’t mean that, for example, an insurance company
like A.I.G.
grafting a hedge fund on top of it is something that is optimal.
Even with the best regulators, if you start having so much
differentiation of functions and products within a single company,
a single institution, a conglomerate, essentially, things could
potentially slip through the cracks. And people just don’t know
what they’re getting into. I mean, I guarantee you that the average
A.I.G. insurance policyholder had no idea that this stuff was going
on. And in that sense I think you can make an argument that there
may be a breaking point in which functions are so different that
you don’t want a single company doing everything.
But when it comes to something like investment banking versus
commercial banking, the experience in a country like Canada would
indicate that good, strong regulation that focuses less on the
legal form of the institution and more on the functions that
they’re carrying out is probably the right approach to take.
II. The Ticket to the Middle Class
Staying on the
Great Depression, it led to a surge in high-school graduation.
A high-school diploma during that decade or two went from being
elite to the norm, and it became a ticket to the middle class. I’m
curious what you think today’s ticket to the middle class is. Do
you want everybody aspiring to a four-year-college degree? Is a
two-year or vocational degree enough? Or is simply attending
college, whether or not you graduate, sufficient to reach the
middle class?
THE PRESIDENT: We set out a goal in my
speech to the joint session that said everybody should have at
least one year of post-high-school training. And I think it would
be too rigid to say everybody needs a four-year-college degree. I
think everybody needs enough post-high-school training that they
are competent in fields that require technical expertise, because
it’s very hard to imagine getting a job that pays a living wage
without that — or it’s very hard at least to envision a steady job
in the absence of that.
And so to the extent that we can upgrade not only our high
schools but also our community colleges to provide a sound
technical basis for being able to perform complicated tasks in a
21st-century economy, then I think that not only is that good for
the individuals, but that’s going to be critical for the economy as
a whole.
I want to emphasize, though, that part of the challenge is
making sure that folks are getting in high school what they need as
well. You know, I use my grandmother as an example for a lot of
things, but I think this is telling. My grandmother never got a
college degree. She went to high school. Unlike my grandfather, she
didn’t benefit from the G.I. Bill, even though she worked on a
bomber assembly line. She went to work as a secretary. But she was
able to become a vice president at a bank partly because her
high-school education was rigorous enough that she could
communicate and analyze information in a way that, frankly, a bunch
of college kids in many parts of the country can’t. She could write
—
Today, you mean?
THE PRESIDENT: Today. She could write
a better letter than many of my — I won’t say “many,” but a number
of my former students at the University
of Chicago Law School. So part of the function of a high-school
degree or a community-college degree is credentialing, right? It
allows employers in a quick way to sort through who’s got the
skills and who doesn’t. But part of the problem that we’ve got
right now is that what it means to have graduated from high school,
what it means to have graduated from a two-year college or a
four-year college is not always as clear as it was several years
ago.
And that means that we’ve got to — in our education-reform
agenda — we’ve got to focus not just on increasing graduation
rates, but we’ve also got to make what’s learned in the high-school
and college experience more robust and more effective.
I was in West Virginia recently talking to
some college students, and these are kids in college, fully
intending to graduate, and yet they were still telling me they’re
not sure whether a college education is worth it. They’re going to
be graduating in a recession. They’re worried their jobs will go to
China. You hear these things all the time. What would you say —
there are a large number of very thoughtful people who have those
concerns — what would you say to them?
THE PRESIDENT: Well, look, I’d start
off by saying just look at the statistics. The unemployment rate
for high-school graduates is at least three times what it is for a
college graduate. So it’s true that in this recession you’re seeing
white-collar jobs impacted. Even before the recession, it’s true
that you saw some outsourcing of white-collar jobs. But if you’re
working the odds, your likelihood of getting a job that pays you a
good, solid middle-class wage is vastly increased upon graduating
from college — unless you’re LeBron James. And so
I think the evidence (3) speaks for itself.
Now, what is true is that a postgraduate education that isn’t
giving you skills that are measurable in some way, that provide you
with some differentiation, means that you’re going to have a little
bit of a harder time. I would argue that anybody — that young
people generally are going to benefit from a good, solid
liberal-arts education. That’s what I got.
If you’re only going to go to school for two years, though, then
making sure that you’re enrolled in a program where at the end of
that journey you can see a job or a career or a field that’s
growing instead of contracting certainly can make some sense.
But, again, I think the big challenge that we’ve got on
education is making sure that from kindergarten or
prekindergarten through your 14th or 15th year of school, or 16th
year of school, or 20th year of school, that you are actually
learning the kinds of skills that make you competitive and
productive in a modern, technological economy.
That’s why I don’t just want to see more college graduates; I
also want to specifically see more math and science graduates, I
specifically want to see more folks in engineering. I think part of
the postbubble economy that I’m describing is one in which we are
restoring a balance between making things and providing services,
whether it’s marketing or catering to people or servicing folks in
some way. Those are all good jobs, and we’re not going to return to
an economy in which manufacturing is as large a percentage as it
was back in the 1940s just because of automation and technological
advance.
And there are advantages to service jobs,
right? Less injury —
THE PRESIDENT: Less injury, less
strain. And I’ve always claimed that if a Wal-Mart
associate was getting paid 25 bucks an hour like the autoworker,
then there’s no reason for complaint.
Although I do think that there’s a culture of making things in a
factory that appeals to people and that I understand. Whenever I’d
walk into a factory during the campaign and would see these big
turbines — things that, you know, you’d say, well, this is neat
stuff — in a way you wouldn’t when you walk into a retail
store.
But the broader point is that if you look at who our long-term
competition will be in the global economy — China, India, the E.U.,
Brazil, Korea — the countries that are producing the best-educated
work force, whose education system emphasizes the sciences and
mathematics, who can translate those technology backgrounds or
those science backgrounds into technological applications, they are
going to have a significant advantage in the economy. And I think
that we’ve got to have enough of that in order to maintain our
economic strength.
III. The New Gender Gap
Those factories are obviously filled
disproportionately with men. There’s a way in which that reminds me
of your grandparents, even though I know your grandfather wasn’t a
factory worker. You talk about the fact that your grandmother
outearned your grandfather. And in a way your family was a
forerunner of a much larger trend: There’s still sexism, there’s
still a pay gap, clearly, but the pay of men has stagnated, and the
pay of women has gone up.
I think there are a lot of men out there
today, working at G.M. and Chrysler and other
places, who feel the same kind of dejection (4) that your
grandfather did. What do you think the future of work looks like
for men?
THE PRESIDENT: I think it’s an
interesting question, because as I said, you know, you go in to
factories all across the Midwest and you talk to the men who work
there — they’ve got extraordinary skill and extraordinary pride in
what they make. And I think that for them, the loss of
manufacturing is a loss of a way of life and not just a loss of
income.
I think a healthy economy is going to have a broad mix of jobs,
and there has to be a place for somebody with terrific mechanical
aptitude who can perform highly skilled tasks with his hands,
whether it’s in construction or manufacturing. And I don’t think
that those jobs should vanish. I do think that they will constitute
a smaller percentage of the overall economy. And so what we’re
going to have to do is, with a younger generation, find new places
for that kind of work.
The possibilities are there, though. I spoke during the campaign
of this company that I visited, McKinstry, in Seattle, where you’ve
got a bunch of welders and tradesmen who are now retrofitting
buildings. They’re not performing the same kind of manufacturing
that their fathers might have, but with similar skill sets they are
now making hospitals and schools and office buildings much more
energy efficient, and then that’s providing enormous value to the
economy as a whole.
In shaping our recovery package, one of the things I was pushing
very hard was the smart grid (5) as a big project similar to the
Interstate that could have some enormous ramifications for energy
utilization. One of the biggest constraints that we’ve got in
building a smart grid in addition to siting issues, which are sort
of classic political jurisdictional battles, is actually we don’t
have enough trained electricians to lay down those lines. Now, you
can’t tell me that there aren’t a whole bunch of men and women out
there who are interested in those jobs. But somehow we have not
done a good job of matching up the training with the need out
there. And that’s one of the things where government can help, help
to guide and steer our education process in a way that meets future
needs and not just the needs of the past.
Would you also encourage men to become more
comfortable working in fields that they traditionally have not? I
mean, nursing is a very well-paying field. There’s a shortage
there.
THE PRESIDENT: I mean, nursing,
teaching are all areas where we need more men. I’ve always said if
we can get more men in the classroom, particularly in inner cities
where a lot of young people don’t have fathers, that could be of
enormous benefit.
Now, as you and I both know, in a lot of those fields they have
been underpaid because they were predominantly women’s fields. And
so part of what we have to do is to recognize that women are just
as likely to be the primary bread earner, if not more likely, than
men are today. As a consequence, eliminating the pay gap between
men and women, and the pay gap between fields, becomes critically
important. And we’ve already taken action, for example, with the
Lilly Ledbetter
bill (6) to try to move in that
direction.
I think that if you start seeing nursing pay better and teaching
pay better, and some of these other professions, you’re going to
see more men in those fields, although there’s a little bit of a
chicken and an egg — if you start getting more men in those fields,
then the stereotypes about this being a woman’s field and all the
gender stereotypes that arise out of thinking that somehow they’re
not the primary breadwinner, those stereotypes start being whittled
away.
Did Michelle ever make more than you
did?
THE PRESIDENT: Oh, sure.
Probably only for a brief time, because I was working three jobs
most of the time that I was in the State Senate. I was still
practicing law and I was still teaching. So when you kind of put
everything together, I think I was still making a little bit more.
But when I started campaigning for the U.S. Senate and I
had to drop some of those jobs, then she carried us for a couple
years.
IV. Where the Economists are Coming
From
I want to talk broadly about policy. When
you and I spoke during the campaign, you made it clear that you had
thought a lot about the economic debates within the Clinton
administration. And you said that you wanted to have a Robert Rubin type
and a Robert Reich type having a vigorous debate in front of you.
And clearly you have a spectrum of Democrats within your
economic-policy team.
THE PRESIDENT: But I don’t have Paul
Krugman or Joseph
Stiglitz. (7) (Laughter.)
No, this wasn’t about them. But they have
made it clear that they are not working in your administration,
haven’t they?
But in your inner circle, it really is
dominated by Rubin protégés. And I’d be interested if —
THE PRESIDENT: You know, the — I mean,
look, Larry Summers
and Tim Geithner
obviously worked at Treasury under Rubin.
And Peter Orszag, I
think.
THE PRESIDENT: And Orszag — fair
enough. You know, Christy Romer didn’t.
Jared Bernstein
doesn’t — and Jared sits here every morning as part of my economic
team. And Austan Goolsbee
doesn’t. (8)
I mean, the truth is that what I’ve been constantly searching
for is a ruthless pragmatism when it comes to economic policy. It
is probably true that, given the financial crisis
that had arisen, that the fact that both Tim and Larry had
familiarity with financial crises was a plus, because I thought
that we needed some people who could hit the ground running and
would be comfortable dealing with some very large and difficult
economic issues. And frankly, that list is pretty small, because
the last Democratic president we had was Bill Clinton; he was
on the scene for eight years, and for a big chunk of that time, Bob
Rubin was his primary economic-policy maker. So it’s not surprising
that anybody who had experience in those fronts was going to be
coming out of a shop that would have been influenced by that.
Keep in mind, though, I mean, I have enormous respect for
somebody like Joe Stiglitz. I read his stuff all the time. I
actually am looking forward to having these folks in for ongoing
discussion. Somebody who has enormous influence over my thinking is
Paul Volcker, who
is robust enough that, having presided over the Carter and Reagan
years, he’s still sharp as a tack and able to give me huge advice
and to provide some counterbalance.
The last point I’d make, though, is I think that — and I may
have mentioned this to you — but now that I think about it, maybe
it was post-election. When I first started having a round table of
economic advisers, and Bob Reich was part of that, and he was
sitting across the table from Bob Rubin and others, what you
discovered was that some of the rifts that had existed back in the
Clinton years had really narrowed drastically.
They agree a lot more than they used to,
but not entirely.
THE PRESIDENT: Not entirely. But, I
mean, the fact is that Larry Summers right now is very comfortable
making arguments, often quite passionately, that Bob Reich used to
be making when he was in the Clinton White House. Now Larry might
not like me saying that —
Larry Summers is the new Bob Reich
—
THE PRESIDENT: — that he’s become a
soft touch. But, no, I think that one of the things that we all
agree to is that the touchstone for economic policy is, does it
allow the average American to find good employment and see their
incomes rise; that we can’t just look at things in the aggregate,
we do want to grow the pie, but we want to make sure that
prosperity is spread across the spectrum of regions and occupations
and genders and races; and that economic policy should focus on
growing the pie, but it also has to make sure that everybody has
got opportunity in that system.
I also think that there’s very little disagreement that there
are lessons to be learned from this crisis in terms of the
importance of regulation in the financial markets. And I think that
this notion that there is somehow resistance to that — to those
lessons within my economic team — just isn’t borne out by the
discussions that I have every day.
If anything, the only thing I notice, I think, that I do think
is something of a carry-over from Bob Rubin — I see it in Larry, I
see it in Tim — is a great appreciation of complexity.
And a willingness to admit what you don’t
know, in many cases.
THE PRESIDENT: Yes, exactly. And so
what that means is that, as we’re making economic policy, I think
there is a certain humility about the consequences of the actions
we take, intended and unintended, that may make some outside
observers impatient. I mean, you’ll recall Geithner was just
getting hammered for months. But he, I think, is very secure in
saying we need to get these things right, and if we act too
abruptly, we can end up doing more harm than good. Those are
qualities that I think have been useful.
V. Postreform Health care
You have suggested that health care is now
the No. 1 legislative priority. It seems to me this is only a small
generalization — to say that the way the medical system works now
is, people go to the doctor; the doctor tells them what treatments
they need; they get those treatments, regardless of cost or,
frankly, regardless of whether they’re effective. I wonder if you
could talk to people about how going to the doctor will be
different in the future; how they will experience medical care
differently on the other side of health
care reform.
THE PRESIDENT: First of all, I do
think consumers have gotten more active in their own treatments in
a way that’s very useful. And I think that should continue to be
encouraged, to the extent that we can provide consumers with more
information about their own well-being — that, I think, can be
helpful.
I have always said, though, that we should not overstate the
degree to which consumers rather than doctors are going to be
driving treatment, because, I just speak from my own experience,
I’m a pretty-well-educated layperson when it comes to medical care;
I know how to ask good questions of my doctor. But ultimately, he’s
the guy with the medical degree. So, if he tells me, You know what,
you’ve got such-and-such and you need to take such-and-such, I
don’t go around arguing with him or go online to see if I can find
a better opinion than his.
And so, in that sense, there’s always going to be an asymmetry
of information between patient and provider. And part of what I
think government can do effectively is to be an honest broker in
assessing and evaluating treatment options. And certainly that’s
true when it comes to Medicare and
Medicaid,
where the taxpayers are footing the bill and we have an obligation
to get those costs under control.
And right now we’re footing the bill for a
lot of things that don’t make people healthier.
THE PRESIDENT: That don’t make people
healthier. So when Peter Orszag and I talk about the importance of
using comparative-effectiveness studies (9) as a way of reining in costs, that’s
not an attempt to micromanage the doctor-patient relationship. It
is an attempt to say to patients, you know what, we’ve looked at
some objective studies out here, people who know about this stuff,
concluding that the blue pill, which costs half as much as the red
pill, is just as effective, and you might want to go ahead and get
the blue one. And if a provider is pushing the red one on you, then
you should at least ask some important questions.
Won’t that be hard, because of the trust
that people put in their doctors, just as you said? Won’t people
say, Wait a second, my doctor is telling me to take the red pill,
and the government is saving money by saying take the blue
—
THE PRESIDENT: Let me put it this way:
I actually think that most doctors want to do right by their
patients. And if they’ve got good information, I think they will
act on that good information.
Now, there are distortions in the system, everything from the
drug salesmen and junkets to how reimbursements occur. Some of
those things government has control over; some of those things are
just more embedded in our medical culture. But the doctors I know —
both ones who treat me as well as friends of mine — I think take
their job very seriously and are thinking in terms of what’s best
for the patient. They operate within particular incentive
structures, like anybody else, and particular habits, like anybody
else.
And so if it turns out that doctors in Florida are spending 25
percent more on treating their patients as doctors in Minnesota,
and the doctors in Minnesota are getting outcomes that are just as
good — then us going down to Florida and pointing out that this is
how folks in Minnesota are doing it and they seem to be getting
pretty good outcomes, and are there particular reasons why you’re
doing what you’re doing? — I think that conversation will
ultimately yield some significant savings and some significant
benefits.
Now, I actually think that the tougher issue around medical care
— it’s a related one — is what you do around things like
end-of-life care —
Yes, where it’s $20,000 for an extra week
of life.
THE PRESIDENT: Exactly. And I just
recently went through this. I mean, I’ve told this story, maybe not
publicly, but when my grandmother got very ill during the campaign,
she got cancer; it was determined to be terminal. And about two or
three weeks after her diagnosis she fell, broke her hip. It was
determined that she might have had a mild stroke, which is what had
precipitated the fall.
So now she’s in the hospital, and the doctor says, Look, you’ve
got about — maybe you have three months, maybe you have six months,
maybe you have nine months to live. Because of the weakness of your
heart, if you have an operation on your hip there are certain risks
that — you know, your heart can’t take it. On the other hand, if
you just sit there with your hip like this, you’re just going to
waste away and your quality of life will be terrible.
And she elected to get the hip replacement and was fine for
about two weeks after the hip replacement, and then suddenly just —
you know, things fell apart.
I don’t know how much that hip replacement cost. I would have
paid out of pocket for that hip replacement just because she’s my
grandmother. Whether, sort of in the aggregate, society making
those decisions to give my grandmother, or everybody else’s aging
grandparents or parents, a hip replacement when they’re terminally
ill is a sustainable model, is a very difficult question. If
somebody told me that my grandmother couldn’t have a hip
replacement and she had to lie there in misery in the waning days
of her life — that would be pretty upsetting.
And it’s going to be hard for people who
don’t have the option of paying for it.
THE PRESIDENT: So that’s where I think
you just get into some very difficult moral issues. But that’s also
a huge driver of cost, right?
I mean, the chronically ill and those toward the end of their
lives are accounting for potentially 80 percent of the total health
care bill out here.
So how do you — how do we deal with
it?
THE PRESIDENT: Well, I think that
there is going to have to be a conversation that is guided by
doctors, scientists, ethicists. And then there is going to have to
be a very difficult democratic conversation that takes place. It is
very difficult to imagine the country making those decisions just
through the normal political channels. And that’s part of why you
have to have some independent group that can give you guidance.
It’s not determinative, but I think has to be able to give you some
guidance. And that’s part of what I suspect you’ll see emerging out
of the various health care conversations that are taking place on
the Hill right now.
VI. Out of the Rough?
Do you think this recession is a big-enough
event to make us as a country willing to make some of the sorts of
hard choices that we need to make on health care, on taxes in the
long term — which will not cover the cost of government — on
energy? Traditionally those choices get made in times of depression
or war, and I’m not sure whether this rises to that
level.
THE PRESIDENT: Well, part of it will
depend on leadership. So I’ve got to make some good arguments out
there. And that’s what I’ve been trying to do since I came in, is
to say now is the time for us to make some tough, big
decisions.
The critics have said, you’re doing too much, you can’t do all
this at once, Congress can’t digest everything. I just reject that.
There’s nothing inherent in our political process that should
prevent us from making these difficult decisions now, as opposed to
10 years from now or 20 years from now.
It is true that as tough an economic time as it is right now, we
haven’t had 42 months of 20, 30 percent unemployment. And so the
degree of desperation and the shock to the system may not be as
great. And that means that there’s going to be more resistance to
any of these steps: reforming the financial system or reforming our
health care system or doing something about energy. On each of
these things — you know, things aren’t so bad in the eyes of a lot
of Americans that they say, We’re willing to completely try
something new.
But part of my job I think is to bridge that gap between the
status quo and what we know we have to do for our future.
Are you worried that the economic cycle
will make that much harder? I mean, Roosevelt took office four
years after the stock market crashed. You took office four months
after Lehman Brothers
collapsed. At some point people may start saying, Hey, why aren’t
things getting better?
THE PRESIDENT: It’s something that we
think about. I knew even before the election that this was going to
be a very difficult journey and that the economy had gone through a
sufficient shock and that it wasn’t going to recover right
away.
In some ways it’s liberating, though, in the sense that whether
I’m a one-termer or a two-termer, the problems are big enough and
fundamental enough that I can’t sort of game it out. It’s not one
of these things where I can say, Oh, you know what, if I time it
just right, then the market is going to be going up and
unemployment will be going down right before re-election. These are
much bigger, much more systemic problems. And so in some ways you
just kind of set aside the politics.
What I’m very confident about is that given the difficult
options before us, we are making good, thoughtful decisions. I have
enormous confidence that we are weighing all our options and we are
making the best choices. That doesn’t mean that every choice is
going to be right, is going to work exactly the way we want it to.
But I wake up in the morning and go to bed at night feeling that
the direction we are trying to move the economy toward is the right
one and that the decisions we make are sound.
David Leonhardt is an economics columnist for The Times and a
staff writer for the magazine.
This article will appear in this Sunday's Times Magazine.