Barack Obama fell all over his feet trying to do the Alley Shuffle today, having to recant an absurd statement that "the private sector is doing fine" just a few hours after he made it, during a "surprise" White House press conference this morning. One purpose of the press conference was to demand that European leaders take "clear action" on the crisis and bail out the banks fast. Now, the Europeans can demand some clarity of Obama.
Already by the afternoon, Obama had to back-track fast. "It's absolutely clear that the economy is not doing fine, that's the reason I had the press conference," he proclaimed when a reporter questioned him. "If you look at what I said this morning, we've actually seen some good momentum in the private sector... record corporate profits... so that has not been the greatest drag on the economy."
The same Obama tried to lecture European nations this morning. Just one day after Fed Chairman Ben Bernanke had said that "The situation in Europe poses significant risks to the U.S. financial system," Obama was demanding bailouts. "There is a path out of this challenge. These decisions are in the hands of Europe's leaders; they understand the urgent need to act. There are specific steps they can take right now to prevent the situation from getting worse. One of those steps is taking clear action as soon as possible to inject capital into weak banks," Obama said, according to Britain's Guardian and Daily Telegraph.
"The focus must be on strengthening the banks, like we did in 2008," he said. "EU leaders are in discussions about that and they are going in the right direction."
Obama then tried again to offer the U.S. debacle as good advice for Europe to follow: "If you are engaging in austerity too quickly, it makes it harder to pay off your debts. Markets respond... if you're contracting, they bet you're not going to pay off your debts." After a bank bail-out, a proper plan for growth is needed, he said.
"The sooner [leaders] act, the more decisive and concrete their action, the sooner people and markets will regain some confidence."
Obama said he had been in "constant contact" with European leaders and his own financial advisers as the crisis developed. He said Greece should stay within the Euro zone, because "hardships will likely be worse" if it leaves. He claimed that the U.S. was strong enough to absorb "some of the shocks from across the Atlantic," but that the European crisis was still a threat to America's recovery. "If Europe goes into recession, that means we are selling fewer goods, fewer services—and that's going to have some impact," he said. He added: If there's less demand for our products in places like Paris or Madrid, it could mean less business for manufacturing in places like Pittsburgh and Milwaukee.