In his news conference today, President Obama outlined the country's dire financial picture and addressed the conservative position that government should adopt a hands-off stance to such problems:
There have been criticisms from a bunch of different directions about this bill, so let me just address a few of them. Some of the criticisms really are with the basic idea that government should intervene at all in this moment of crisis. Now you have some people, very sincere, who philosophically just think that government has no business interfering in the marketplace, and in fact there are several who suggested that FDR was wrong to intervene back in the New Deal. They're fighting battles that I thought were resolved a pretty long time ago.
Most economists, almost unanimously, recognize that even if philosophically you're wary of government intervening in the economy, when you have the kind of problem we have right now, what started on Wall Street goes to Main Street, suddenly businesses can't get credit, they start paring back their investment, they start laying off workers, workers start pulling back in terms of spending, that when you have that situation, that government is an important element of introducing some additional demand into the economy.
The deregulation of the financial industry was a result of this hands-off approach. According to such an outlook, the market is always self-correcting, since it never wants to sabotage its chances of maximizing profit. Yet the lack of oversight leads to rampant speculation undertaken by those who want to realize a quick return. When we add in tax cuts for the wealthy that clearly don't trickle down to the rest of us and the enormous cost of two simultaneous wars, we've got more than enough ingredients for an economic disaster.
According to the latest Gallup Poll, the public agrees with Obama's determination to have the government play an active role in stimulating the economy:
The American public gives President Barack Obama a strong 67% approval rating for the way in which he is handling the government's efforts to pass an economic stimulus bill, while the Democrats and, in particular, the Republicans in Congress receive much lower approval ratings of 48% and 31%, respectively.
It seems that the public recognizes, along with the president, a "full-blown economic crisis" when it sees one–despite the misgivings of those whose economic outlook played a major role in the current crisis.