How does a lame duck president with little or no credibility on economic issues and overall very low job approval ratings make a nationwide speech that dramatically changes public opinion on the Paulson Plan?
How does a president with few rhetorical skills find the words and delivery to be convincing to a skeptical nation?
How does a president with little credibilty on economic issues rescue the plan proposed by the one person in his administration who has some credibility on economic issues?
How does a Republican president get GOP members of Congress to validate what he says after the speech even though they are the ones who appear to be the most skeptical about the plan?
Update: After The Speech
I didn't hear the personal appeal from the president that I thought was needed. I also didn't hear the memorable one-liner (i.e, "The only thing we have to fear is fear itself.") that people will remember and repeat tomorrow. It was a largely topline explanation of the problem that didn't really explain why the average peson should support the Paulson plan. The president didn't do any harm with this speech, but I'm not sure he moved the needle either.
counterproductive
There is a good chance that whatever Bush says will make things worse.
There is a better chance that Bush will make another "Great Moments in Presidential History" on Letterman.
I can't bear to listen. Maybe someone will post a transcript with the errors corrected.
Bush could leave office with a less than 10% approval rating.
Mission accomplished
Heckuva job Brownie
Tough speech to make
He had to strike a balance -- express the urgency of the situation without inciting all-out panic. He had to explain the root causes of the crisis in simple terms, and I think he succeeded.
I think he did the best he could given his limited oratory skills.
Now it's up to Congress. We need this passed by the end of the week.
President's Speech
"The government is the one institution with the patience and resources to buy these assets at their current low prices and hold them until markets return to normal." George W. Bush 9/24/2008
Isn't this implied promise at odds with the stated intentions of P&B as expressed in their testimony before Congress? Didn't they say they plan to buy at prices nearer to "projected hold-to-maturity prices" -- the difference being used to recapitalize the banks' balance sheets?
CBO testimony
At the same time, intervention on a massive scale is not without risks to taxpayers and to the economy.7 Almost by definition, the intervention cannot solve insolvency problems without shifting costs to the taxpayers.
Ironically, the intervention could even trigger additional failures of large institutions, because some institutions may be carrying troubled assets on their books at inflated values. Establishing clearer prices might reveal those institutions to be insolvent. (To the extent such insolvencies were revealed, the net effect might not be deleterious. Providing more transparency about the lack of solvency at specific institutions may be necessary to restore trust in the financial system.)
http://www.cbo.gov/ftpdocs/97xx/doc9767/MktTurmoil.htm
CBO alternatives analysis
An alternative approach that is more directly aimed at addressing insolvency concerns is for the government to invest directly in financial institutions.
Such proposals have some advantages:
They provide some upside to taxpayers in the form of dividends and capital gains on preferred stock. Under some proposals, the payments of dividends to the government would be deferred.
They avoid the challenge of pricing and then selling individual assets (although they raise the issue of how to price the equity shares the government offers to purchase).
They avoid rewarding the firms that have made the worst investment decisions.
They keep the government as a minority shareholder. The firms’ managers would continue to run the firms on a profit-maximizing basis, thereby mitigating the risks of the government using its equity positions to pursue a range of public policy goals.
They could impose losses on shareholders and changes in management.
Such plans have some disadvantages though:
They fail to address directly the illiquidity problems for some assets and the associated uncertainty.
The assistance may not be targeted to the institutions most in need of help, and the firms that most need capital may be most reluctant to take it.
The approach could inject additional funds into institutions whose business model is no longer viable. Past experience suggests that extending the operations of insolvent institutions may increase the ultimate cost to taxpayers.
The proposals raise difficult questions about eligibility criteria. For example, would finance companies that are part of large diversified holding companies be eligible?
http://www.cbo.gov/ftpdocs/97xx/doc9767/MktTurmoil.htm
The CBO exists because presidents and their administrations cannot be trusted.