Obama sees signs of economic progress but more struggle

14 April 2009 18:30  [Source: ICIS news]

Obama sees economic progress but more struggle tooWASHINGTON (ICIS news)--President Barack Obama said on Tuesday that he sees encouraging signs of economic progress, but he cautioned that this year still will be difficult and promised unrelenting effort toward economic recovery.

In what the White House billed as a major address on the economy, Obama told an audience at Georgetown University in Washington that stimulus efforts by his administration, Congress and the Federal Reserve to restore credit and revive the housing and automotive sectors are having an effect.

“And taken together, these actions are starting to generate signs of economic progress,” he said.

He said the $787bn (€590bn) federal stimulus bill passed by Congress and approved by him in February is beginning to have effect in saving jobs that otherwise might have been cut in schools and police departments across the country, boosting infrastructure projects and construction jobs and increasing credit supply for small business and consumer lending.

“This is all welcome and encouraging news but it does not mean that hard times are over,” Obama said.

He said that “2009 will continue to be a difficult year for America’s economy”.

“The severity of this recession will cause more job losses, more foreclosures and more pain before it ends,” he said.  “Credit is still not flowing nearly as easily as it should.”

He said the ongoing process of restructuring the auto and financial sectors “will involve difficult and sometimes unpopular choices”, perhaps a reference to reports that the White House may force General Motors into bankruptcy.

“All of this means that there is much more work to be done,” the president said.

“And all of this means that you can continue to expect an unrelenting, unyielding, day-by-day effort from this administration to fight for economic recovery on all fronts,” he added.

Obama outlined what he termed “a new foundation” - the title of his speech - for the US economy, based on five pillars of reforms or initiatives in financial markets, education, renewable energy, health care and government entitlement programmes such as Medicare and Social Security.

The president appeared to be setting “a new foundation” as the core of his administration going forward, echoing famous policy campaigns of earlier Democrat administrations such as the “New Deal” of Franklin Roosevelt in the 1930s, the "New Frontier" of John Kennedy in the early 1960s and the "Great Society" programmes of Kennedy’s successor, Lyndon Johnson, in the late 1960s.

The president placed emphasis on near-term reforms for regulating the US financial and banking sectors and on health care entitlements, saying he wanted to see legislation on both issues on his desk before the end of this year.

He also renewed his commitment to action on global warming, saying that the only way to transition the US economy to renewable and alternative energy resources “is through a gradual, market-based cap on carbon pollution”.

However, Obama did not say he expects to see completed legislation on that controversial topic this year.

Repeating the “glimmers of hope” phrase he first used in a press conference last Friday, Obama offered a cautious forecast for an eventual economic recovery.

“There is no doubt that times are still tough.  By no means are we out of the woods just yet,” he said.  “But from where we stand, for the very first time, we are beginning to see glimmers of hope.”

($1 = €0.75)

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Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy                                                          


By: Joe Kamalick
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