After the Inauguration

By Andre Jackson
February 09, 2009

What a party! Now that the last bits of confetti have been swept from Washington’s convoluted streets and exhausted reporters have returned to newsrooms across the nation, the real work begins for business journalists.

It’s time to report on a new chapter of U.S. economic history. One being written as the private and public sectors labor mightily to try and turn around an economy that still seems to be hurtling downhill.

After a year of dramatic undulations and upheaval in the world’s stalwart economies that’s produced WWII-sized headlines and near-continuous news alerts on TV and online, it’s pretty apparent that this stretch of the natural business cycle has a ways to run yet.

The inauguration of President Barack Obama shows that millions of voters of all political colors were ready for change. I’m not revealing my own political preferences here – only pointing out that Obama’s marketing campaign built around “change” – whatever that is – paid off. As the 2008 election season wore on, the economy’s troubles seemed to deepen. That led many voters, apparently, to view the new President as the best man to lead the U.S. and, to a large degree, the world out of the slump.

Can he do it? That’s the big, broad – and still open – question for the nation. And it’s a starting point for business journalists to do what we’ve always done – deconstruct the mammoth, unanswerable question and hammer it into manageable, answerable, smaller queries.

Reds and blues alike would agree that, despite what some voters seem to think, Obama, by himself, can’t resuscitate the economy. That’s where the rest of Washington, D.C. comes in, meaning Congress and the various agencies headquartered in the giant stone buildings that dominate the capital’s core.

It’s important to understand also that even the influential Washington government and regulatory machine has to somehow work in concert – more or less – with the private businesses that fuel the free world’s economic engines.

Both the public and private sectors are needed to make the economy hum, although economists and pols vary widely over each sector’s role.

Even so, all eyes are on Washington these days. Right or wrong, the D.C. establishment has been pilloried for three quarters of a century for appearing to stoke the Great Depression by not acting as the financial system imploded. That means politicians and agency heads now want to be seen as doing something – anything– to boost the economy during times of fiscal stress.

The trillion-dollar question: what will ease the economy onto recovery’s road? Preparing readers to follow the debate and drama in an informed manner provides grist for lots of insightful business news coverage.

As I write this, Congress is grinding quickly away on an economic stimulus package that contains dollar amounts mind-boggling in their size. The U.S. House recently passed an $850 billion economic stimulus package. As the debate wears on, there are many questions reporters should examine.

Here’s a big one that tends to get lost in the red-blue debate: How will the U.S. pay for a near-trillion-dollar stimulus package?

It’s worth explaining to readers just how Congress plans to pay for a mammoth package of tax cuts and spending increases. How can the nation cut revenue and spend more simultaneously? Or at least do so without increasing our already sizable national debt. Who will buy that new debt anyway? Countries that have happily snapped up U.S. debt obligations in the past, such as China, are now facing struggling economies of their own. How much debt is OK; how much is crippling? Those are good questions to pose to both free-market economists and those of the more-interventionist, Keynesian stripe.

The question of how much debt is prudent for the U.S. government as its own citizens painfully transition in their personal lives from being debtors to savers is, in a sense, the easy, if complex, one to examine.

The harder one for the nation, and journalists, to tackle is embodied in the title of Spike Lee’s movie “Do the Right Thing.” What is the right thing – or things – to do?

The stimulus plan Congress is wrestling with would cost more than the Iraq War has so far, according to The Wall Street Journal. With a reported cost in the $800 billion to $900 billion range, it would dramatically redirect government away from the limited roles championed by past Republican administrations. Funding would be beefed up for everything from smoking cessation programs to homeland security. Much of that spending would last for years, well beyond economists’ projected end to this recession.

There’s a lot here for reporters to dive into: What’s the economic effect of expanding federal spending long-term? Which choice is most conducive to economic growth – boosting public spending or private-sector growth?

Both liberals and conservatives have powerful arguments to make here.

Less often heard are the voices of centrists, who see the need for both a robust free market and at least a moderate level of government initiatives. Some observers wistfully point to President Bill Clinton as one who successfully jogged along the centrist path, benefiting the economy in the process.

Another big question: What do businesses large and small have to say about what’s going on in Washington? Are entrepreneurs and CEO’s staunchly sticking by their low-taxes-fuel-business-growth arguments? Or is the lure of lucrative contracts from newly enriched government agencies too hard to resist?

Ditto for companies targeting lower-income consumers. Their customers may see a bit more money in their pockets, thanks to tax cuts targeted at the working classes. Are these businesses ginning up marketing campaigns to spur the spending of that money? Or will retailers battle banks and investment companies for control of those dollars as saving money gains newfound popularity?

These are unprecedented times for the world’s economies. It’s up to business journalists to help audiences make sense of it all.

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Copyright © 2009 Donald W. Reynolds National Center for Business Journalism