The Chair of President Obama’s Council of Economic Advisers, Dr. Christina Romer, on Sunday said that the fundamentals of the economy are "sound," a comment similar to one that her boss as a candidate repeatedly attacked Sen. John McCain, R-Ariz., for making during the heat of last year’s presidential campaign.
"Of course, the fundamentals are sound," Romer said on Meet the Press, "in the sense that the American workers are sound. We have a good capital stock, we have good technology. We know that, temporarily, we’re in a mess, right? We have seen huge job loss, we’ve seen very large falls in GDP. Certainly in the short run, we’re in a bad situation."
On September 15, McCain said, "As you know, there’s been tremendous turmoil in our financial markets and Wall Street, and it is — it’s –people are frightened by these events. Our economy, I think, still the fundamentals of our economy are strong. But these are very, very difficult times. And I promise you, we will never put America in this position again. We will clean up Wall Street. We will reform government."
That morning, more bad Wall Street news was hitting — with a focus on Merrill Lynch and Lehman Brothers — and McCain’s remarks provided an easy opportunity to paint the Republican as out of touch.
"We just woke up to news of financial disaster, and this morning he said that the fundamentals of the economy are still strong," Obama said on September 15 in Grand Junction, Colo. "Sen. McCain – what economy are you talking about? "What’s more fundamental than the ability to find a job that pays the bills and can raise a family? What’s more fundamental than knowing that your life savings is secure, and that you can retire with dignity? What’s more fundamental than knowing that you’ll have a roof over your head at the end of the day?"
McCain later tried to explain that he meant by way of defining "the fundamentals of the economy" as "the American worker and their innovation, their entrepreneurship, the small business, those are the fundamentals of America, and I think they’re strong."
But many on the Obama campaign believe this remark by McCain — and the way candidate Obama used it to portray McCain as out of touch on the economy — was a crucial moment in their eventual victory.
Flash-forward to Friday, when President Obama — amidst some economic cheerleading from the administration — said that "if you’ve been laid off your job, if you’ve lost your home, then, you know, right now is very tough. But we’re providing help along the way. That’s why we put a housing program in place; that’s why we’re going to be announcing additional steps to help small businesses."
But, Mr. Obama said, "if we are keeping focused on all the fundamentally sound aspects of our economy, all the outstanding companies, workers, all the innovation and dynamism in this economy, then we’re going to get through this. And I’m very confident about that."
Republican aides twisted this to suggest that the president had declared the fundamentals of the economy to be sound, which he had not.
This morning NBC’s David Gregory asked Romer about the quote, saying that what Obama said sounded "similar" to what he’d hammered McCain for saying.
Romer said that "when the President says he’s focusing on fundamentals, what he means is, is we’re focusing on fixing the fundamentals. We’ve always said we’re not looking at the ups and downs of the stock market. We’re looking for those crucial indicators: when are jobs turning around, when are sales turning around, when do we see consumers coming to life. That’s the kind of thing that certainly I’m looking at in terms of when’s the economy going to be doing better."
What’s the difference between what McCain said in 2008 and what President Obama said Friday?
Romer said that "where we are today is obviously not good. We have a plan in place to get to a good place. I think that’s the crucial — a fundamentally crucial difference, is to make sure that you have put in place all of the comprehensive the programs that will get us back to the fundamentals." Additionally, she said, "the president said in terms of fundamentals, we need to make changes. That’s why he’s focusing on energy and education, getting the budget deficit under control… He said, when we get through this thing, we want to be in a better place."
Perhaps McCain was right back then?
"I really think you’re misinterpreting the president," Romer said. "They key thing the president was saying is we have our eyes on the fundamentals."