Obama, Geithner move fast to fight U.S. mega-crisis

WASHINGTON, Feb. 10 (UPI) -- U.S. President Barack Obama and his new treasury secretary, Timothy Geithner, are moving with unparalleled speed to launch their ambitious, sweeping programs to combat America's financial crisis and rapidly worsening recession.

No incoming U.S. administration since Franklin D. Roosevelt's in 1933 has faced such a dire situation.

On Tuesday, Geithner released details of a gigantic plan that he admitted probably will eventually seek to pump no less than $1.5 trillion into the economy and generate a hoped-for 4 million jobs. "We believe that the policy response has to be comprehensive and forceful," he said. "There is more risk and greater cost in gradualism than in aggressive action."

Obama has shown no sign of hesitation or lack of energy in throwing himself into the fray to persuade the American people to back the program.

The president pre-empted primetime television viewing for a major news conference Monday night and flew to Fort Myers, Fla., Tuesday to make another in a series of high-profile public pitches for his program. On Monday, he had flown to Indiana to make another one before returning to the White House for his news conference.

The conference was a stunning contrast both to Obama's campaign rhetoric and to the style of two-term President George W. Bush before him. Unlike during his campaign, he did not stay vague or emphasize the "politics of hope." He said bluntly and clearly that the United States was teetering on the brink of economic and financial catastrophe and that his plan was essential. He spelled out the details of his plan in long answers.

The president frankly acknowledged areas of uncertainty. He dared to speak a blunt and frightening truth -- that no one yet knows the state of indebtedness or creditworthiness of U.S. banks. "Any given bank, they're not sure what kinds of losses are there. We've got to open things up and restore some trust," he said.

Obama has often been accused by his detractors of enjoying a criticism-free, true-believing, naive and childish worship from the mainstream U.S. media. But that wasn't true at all on Monday night. Skepticism at many of the president's policies and statements was widespread, though Obama appeared far more in command of the facts than most of his questioners -- not that that was hard.

And there was only a little of President John F. Kennedy and none of Dr. Martin Luther King in the president's appeals to emotions and in his historical references. He made very explicit that his role model for speaking to the public, especially through the news conference format, was Franklin Roosevelt in 1933. And not coincidentally, FDR's very first priority was to rescue the U.S. banking system from the total collapse that the benighted policies of his predecessor, Republican President Herbert Hoover, had left them in.

The very morning after Obama spoke, on Tuesday, the Senate moved toward its vote on a gigantic $838 billion stimulus bill, even larger than the $819 billion behemoth already passed by the House of Representatives. Both bills will have to be adapted in a regular House-Senate reconciliation conference before they can be signed into law.

Also Tuesday, General Motors announced it was cutting no fewer than 10,000 jobs.

In addition to launching new initiatives, Obama and his colleagues are seeking to make better use of the $700 billion bailout package that President Bush and his last treasury secretary, Henry "Hank" Paulson, demanded and received from the previous 110th Congress to prevent a system-wide bank collapse. It rapidly became clear that Bush and Paulson, in fact, had no idea what to do with much of the money.

Geithner has been working on a new plan to learn from the mistakes of the first $350 billion of that package that already has been delivered to banks without much oversight and little in the way of conditions. Obama said he would change that. But the conditions may not be as tough as some in the administration wanted.

Geithner foresees eventually mobilizing as much as $1 trillion to boost consumer spending, especially on cars. Some of the money may be used to try to stabilize real estate business across the United States.

Geithner's revised plans to help the banks will demand far more careful, bank-by-bank financial assessment than Bush and Paulson ever asked for in order to assess what funds individual institutions need to survive, along with careful loan structuring conditions to ensure that the money will be paid back to the federal government.

Obama and Geithner's plans are far more detailed and coherent than anything Bush and Paulson came up with. And they appear to have at least a 50-50 chance of doing some good. But the financial and economic Perfect Storm that the United States is entering is unprecedented within almost everyone's living memory, and the voyage to safety is still far from sure.