Last week, I had the privilege of attending a finance roundtable at the White House and the opportunity to participate in Q&A sessions with the highest-ranking economic officials in the administration – including President Obama himself.
I asked for your questions, and through dozens of emails and even more comments in the forums of InvestorPlace.com, you gave me the ammunition for some hard questions for Obama and his team.
There were a number of good questions asked of White House officials at last week’s summit. And while the answers were often well-crafted and non-controversial, a closer read of the responses reveals some important insight into what Obama’s economic team is doing to fix things right now.
Or more particularly, what they aren’t doing to fix things.
Now that I’ve had a chance to go through my notes, I’d like to share three key topics from last week’s White House summit that could be of grave concern to investors:
Reason to Panic No. 1: Slow and Steady May Not Win This Race
Obama’s youngest Cabinet member and chairman of the Council of Economic Advisors, Austan Goolsbee, was the first official to visit us for a Q&A. He was defensive about the unemployment picture right out of the gate, and urged perspective on the disappointing May numbers that caused the unemployment rate to rise to 9.1%.
His stance? The long-term trend is more important than “a variable series like the monthly job numbers.” Goolsbee warned the financial journalists in attendance not to “overreact.”
Fair point – and the focus on sustainable job growth and not another boom-and-bust cycle is admirable. In fact, it’s one of the biggest reasons I found for optimism over Obama’s economic policy.
However, Peter Goodman of AOL/The Huffington Post was sharp enough to interject the concern many Americans share: Slow and steady growth is all well and good, but where is the sense of urgency?
Goolsbee demurred. He said there is indeed a sense of urgency, but not “a sense of panic.”
Unfortunately, he also let a bombshell drop rather nonchalantly: That the average unemployment predicted by the White House across 2011 was 9.3% – making 9.1% “ahead of schedule.”
Who’s schedule involves barely beating 9.3% unemployment something to cheer about?
Since Goolsbee tap-danced around Peter’s question, I tried another tact: If we are “on schedule,” I asked, does that mean Americans who expect significant improvement on the unemployment front are just plain unrealistic and those out of work need to readjust their expectations?
Goolsbee’s response to me and my colleagues was that “the president’s the first to say ‘That’s not enough. We’ve got to do more.’” But as for setting America’s expectations, he seemed to believe that was on the media and the public – not the administration.
“If you’re relying on me for your message, you’re making a terrible mistake,” he said.
Not very inspiring. Nobody was disputing the value of one million jobs in sustainable businesses, but the point of our questions was to see whether Obama’s team was truly in touch with the severity of the downturn and whether they understood the urgent need to fix the job market.
The answers we got were a variation on “be patient.” I hope the Obama team has a better slogan than that in store for the 2012 race, because I don’t think that will cut it.