Obama needs to restore optimism

WHEN ECONOMIES falter and markets plunge, when joblessness is pervasive and the whole world suddenly feels unhinged, Americans are right to turn to their president for hope, assurance and direction.

Last Monday, as the stock market took a stomach-churning dive and Americans grappled with Standard & Poor's unprecedented downgrade of the nation's credit rating, what Americans heard from President Barack Obama fell woefully short of expectations.

Worse, in a speech that was lame and downright uninspiring, he also seemed to be ignoring reality.

After noting that S&P made its decision because it doubted our political system's ability to act, the president said that “the markets, on the other hand, continue to believe that our credit status is AAA.”

Really?

Was he talking about the same market that eventually fell 634.76 points that day? Or the one that plunged nearly 700 points the week before, for a drop of 5.67% in the Dow Jones Industrial Average — the biggest weekly point drop in almost three years?

Or maybe he was talking about the market that lost 9.75% of its value during the two-week period leading up to the downgrade.

By characterizing the downgrade as simply the unfortunate byproduct of the partisan debt ceiling debate, Mr. Obama proved once again that he is framing reality quite differently from many Americans. True, the rating downgrade was more a statement about our political climate than anything else, but that shouldn't divert our attention from the nation's $14 trillion debt and the lack of a clear plan to keep that mountain from growing.

To be sure, Mr. Obama doesn't deserve all the blame for the nation's economic problems. After all, his predecessor, President George W. Bush, led the country into two costly wars and signed historic tax-cut bills into law in 2001 and 2003, pushing the nation deeply into the red and holding us hostage to foreign lenders.

FALTERING SPIRIT

Still, the nation's spirit is faltering on Mr. Obama's watch. As president, he must find a way to reinvigorate the hope and imagination of all Americans, Democrats and Republicans alike.

Ultimately, Mr. Obama's failings last week had more to do with what he didn't say than with what he did.

He didn't, for example, say anything about how he, as the leader of our supposedly failed political system, intends to fix the budget problem. Mr. Obama didn't demand that members of Congress immediately cut short their summer recess and get serious about negotiating tax changes and entitlement reforms.

Of course, that would have meant canceling his own vacation this week on Martha's Vineyard and cutting back on his fundraising schedule. Perhaps Mr. Obama could have announced that he and his family were planning to take a “staycation” in Washington, just as so many financially stressed Americans are doing in these times of economic uncertainty.

He also failed to say anything new about how he intends to get more Americans back to work. Although Mr. Obama did call for an extension of payroll tax cuts and unemployment benefits, neither has proven successful in spurring job growth.

In the long run, S&P's downgrade likely will go down in history as symbolic and largely immaterial in a financial sense. After all, the U.S. government is no more likely to default now than it was three weeks ago — or ever, for that matter.

And, in the end, the rating cut actually may prod lawmakers finally to get serious about budget reforms.

But Mr. Obama's legacy — not to mention his chances for re-election — will be defined largely by his ability to restore Americans' optimism for the future and their confidence in this nation's political system. He didn't do that last week.