Americans blame everybody but Obama for economic woes

Lots of blame to go around on America’s failing economy but Americans aren’t ready to blame new President Barack Obama.

At least not yet.

A Washington Post-ABC News poll finds Obama benefits from a widespread perception that others should be blamed for the nation’s economic woes.

Consumers and the failed administration of former President George W. Bush, along with banks, financial institutions and corporations lead the list of those at fault in the eyes of those polled.

But American mood is fickle and political honeymoons usually end quickly…and badly.

Stay tuned.

Reports Reuters:

U.S. President Barack Obama benefits from a broadly held perception that others bear the bulk of responsibility for state of the U.S. economy, according to a Washington Post/ABC News poll published on Tuesday.

Asked who was responsible for the economic meltdown, 80 percent in the poll blamed banks, financial institutions and corporations. Some 70 percent also blamed consumers for taking on too much debt and the former Bush administration for lax regulation. Only 26 percent said the Obama administration was not doing enough to turn the situation around.

Two-thirds of respondents approve of the way Obama is handling the presidency, and 60 percent approve of the way he is handling the economy.

Sixty-four percent said were confident Obama’s policies will improve the economy, down from 72 percent just before he took office in January.

Forty two percent said the country was now heading in the right direction, a five-year high. Late last year, when then-President George W. Bush was in its final months, as many as nine in 10 American said the country was heading in the wrong direction.

 

White House rejects GM, Chrysler bailout plans

Neither General Motors nor Chrysler submitted acceptable plans to receive more federal bailout money, the Obama administration said as it set the stage for a crisis in Detroit that would dramatically reshape the nation’s auto industry.

The White House pushed out GM’s chairman and directed Chrysler to move quickly to forge a partnership with Fiat if it expects to receive additional government assistance.

President Barack Obama and his top advisers have determined that neither company is viable and that taxpayers will not spend untold billions more to keep the pair of automakers open forever.

In a last-ditch effort, the administration gave each company a brief deadline to try one last time to convince Washington it is worth saving, said senior administration officials who spoke on the condition of anonymity to more bluntly discuss the decision.

Obama was set to make the announcement at 11 a.m. Monday in the White House’s foyer.

In an interview with CBS’ "Face the Nation" broadcast Sunday, Obama said the companies must do more to receive additional financial aid from the government.

"We think we can have a successful U.S. auto industry. But it’s got to be one that’s realistically designed to weather this storm and to emerge — at the other end — much more lean, mean and competitive than it currently is," Obama said.

Frustrated administration officials said Chrysler cannot function as an independent company under its current plan. They have given Chrysler a 30-day window to complete a proposed partnership with Italian automaker Fiat SpA, and will offer up to $6 billion to the companies if they can negotiate a deal before time runs out.

If a Chrysler-Fiat union cannot be completed, Washington plans to walk away, leaving Chrysler destined for a complete sell-off. No other money is available.

Shawn Morgan, a Chrysler spokeswoman, said the company wants to work with the Treasury Department and Obama’s auto task force but declined to comment on the White House’s plans.

"With the administration’s announcement on the restructuring of the automotive industry imminent, it would be inappropriate to comment on speculation," Morgan said in a statement early Monday.

For GM, the administration offered 60 days of operating money to restructure. A frantic top-to-bottom effort began Sunday after chairman and CEO Rick Wagoner stepped aside under pressure from the White House.

Fritz Henderson, GM’s president and chief operating officer, became the new CEO, the company said in a statement Monday. Board member Kent Kresa, the former chairman and CEO of defense contractor Northrop Grumman Corp., was named interim chairman of the GM board.

In a major management shake-up, new directors will make up the majority of GM’s board, the automaker said.

"The board has recognized for some time that the company’s restructuring will likely cause a significant change in the stockholders of the company and create the need for new directors with additional skills and experience," Kresa said in a written statement.

Obama advisers saw public outrage come to a head in recent weeks, as populist anger escalated over bonuses paid to American International Group executives. They realized Americans are frustrated with the economy and its business leaders; they also said they would not invest one dollar more than was necessary to keep the companies alive and would walk away if it looked impossible.

Officials said GM had failed to make good on promises made in exchange for $13.4 billion in government loans, although there are currently no plans to call in those loans.

Administration officials still believe GM’s chances are good, given its global brand and its research potential. Officials say they are confident GM can put together a plan that will keep production lines moving in the coming years. They planned to send a team to Detroit to help with that restructuring.

Chrysler, meanwhile, has survived on $4 billion in federal aid during this economic downturn and the worst decline in auto sales in 27 years.

In progress reports filed with the government in February, GM asked for $16.6 billion more and Chrysler wanted $5 billion more. The White House balked and instead started a countdown clock.

Administration officials acknowledged the short turnaround time was harsh; one described it as a nanosecond in a business cycle.

Two people familiar with the plan said officials will demand further sacrifices from the automakers and bankruptcy would still be possible if the automakers failed to restructure. Those officials spoke on condition of anonymity because they were not authorized to make details public.

Administration officials said they hoped large-scale bankruptcy could be avoided, especially if it might be stretched over many years. Any efforts to use the bankruptcy courts would have to be targeted and aggressive and must not prolong a restructuring process, they said.

GM and Chrysler, which employ about 140,000 workers in the U.S., faced a Tuesday deadline to submit completed restructuring plans, but neither company was expected to finish its work. The White House’s plan renders them, as well as a potential discussion about the companies’ borrowed money, moot.

GM owes roughly $28 billion to bondholders. Chrysler owes about $7 billion in first- and second-term debt, mainly to banks. GM owes about $20 billion to its retiree health care trust, while Chrysler owes $10.6 billion.

An exasperated administration official noted that the companies had not done enough to reduce debt; in some cases, it actually increased during this restructuring and review process.

In February, GM said it intended to cut 47,000 jobs around the globe, or almost 20 percent of its work force, close hundreds of dealerships and focus on four core brands — Chevrolet, Cadillac, GMC and Buick.

In an effort to bolster consumer confidence, Obama planned to announce government backing of warranties for GM and Chrysler vehicles. An administration official said there is no price tag yet associated with that promise.

Obama’s aides, aware of the outrage the White House faces if thousands more Americans lose their jobs, appointed a former deputy labor secretary, Ed Montgomery, to lead assistance efforts to cities and towns that depend on the auto industry. The move signaled the White House already was looking to a time when assembly plants may need to operate with far smaller staffs or shut down completely.

Aides note that Obama inherited the auto mess from his predecessor, President George W. Bush.

Under the terms of a loan agreement reached during the last administration, GM and Chrysler are pushing the United Auto Workers to accept shares of stock in exchange for half of the payments into a union-run trust fund for retiree health care. They also want labor costs from the union to be competitive with Japanese automakers with U.S. operations.

Little progress has been made between the companies and the union.

___

AP Auto Writer Tom Krisher in Detroit and AP writer Ken Thomas in Washington contributed to this report.

More American troops headed for Afghanistan

Grappling with a war gone awry, President Barack Obama plans to send thousands more U.S. forces into Afghanistan, hoping to hasten the end of a conflict that still has no clear end in sight.

Obama on Friday will announce a multitiered strategy that banks heavily on world help and invigorated U.S. diplomacy. The Afghanistan war, which Obama calls adrift, is now his, and a central part of the new strategy is to build up the Afghan army.

The broad U.S goal remains much as it was when the war began in the fallout of the Sept 11, 2001 attacks: To dismantle the operations of the Taliban and al-Qaida, which have shifted their power base from Afghanistan to Pakistan in recent years.

Obama plans to send in 4,000 more U.S. military troops, whose mission will be to train and expand the Afghan army to take the lead on counterterrorism. He also plans to send in hundreds more U.S. civilians to help the people of Afghanistan rebuild their nation.

Those forces are on top of the 17,000 extra combat troops that Obama has already approved.

The strategy fits with Obama’s operating premise — that the U.S. failed mightily in the post-Sept. 11 years by focusing on Iraq instead of putting enough military in Afghanistan.

"The president has decided that he’s going to resource this war properly," said one senior administration official involved in Obama’s Afghanistan-Pakistan review. Three Obama officials spoke on condition of anonymity about the plan because it was not yet public.

The build up comes with a cost.

Violence is rising. The war in Afghanistan saw American military deaths rise by 35 percent in 2008 as Islamic extremists shifted their focus to a new front with the West.

Obama’s plan will also cost many more billions of dollars. His officials said Thursday night that they did not yet have a specific budget figure tied to the strategy.

The president’s plan includes no timeline for withdrawal of U.S. troops.

Obama called Afghanistan President Hamid Karzai and Pakistani President Asif Ali Zardari on Thursday to brief them on his plans.

"He made it very clear there are no blank checks," one administration official said.

Obama will detail his strategy at the White House on Friday morning, timed with purpose.

His moves comes ahead of a U.N. conference on Afghanistan next Tuesday in The Hague, where Secretary of State Hillary Clinton will join representatives from more than 80 countries. And Obama himself is attending a NATO meeting next week in France and Germany.

At that meeting, the U.S. expects some NATO coalition members to commit more forces to the flagging war in Afghanistan, Obama officials said Thursday. They did not get specific.

Roughly 65,000 international forces are in Afghanistan, more than half from the U.S.

One part of Obama’s plan is to expose fractures in the Taliban in hopes of weakening it.

Obama officials say the most difficult part of their approach will be in dealing with Pakistan, an often chaotic place with an erratic relationship with the United States. The administration will seek to bolster the democratic government of Pakistan, and try to get the people of that country to see the U.S.-led effort as one that is in their interests.

"We have to address the trust deficit that we have with Pakistanis," one senior administration official said. "That’s not going to be easy."

Obama also will call for increasing aid to Pakistan as long as its leaders confront militants in the border region. The president will work with Congress on language to attach conditions to military aid, sources said.

The U.S. will launch an intensive and expanded diplomatic effort to gain international cooperation, including reaching out to Russia, China, India, Saudi Arabia and even Iran.

The 4,000 military trainers Obama is sending to Afghanistan will come from 82nd Airborne Division at Fort Bragg in North Carolina. All of the troops he is dispatching to Afghanistan, including the combat troops, will be there by fall.

Several sources told The Associated Press the strategy includes 20 recommendations for countering a persistent insurgency that spans the two countries’ border.

The written outline of Obama’s plan describes a "strategy for success," as opposed to an exit strategy, but the goal is the same: stability on both sides of the border that would allow a reduction and eventual withdrawal of U.S. combat forces from Afghanistan.

Sen. Carl Levin, chairman of the Senate Armed Services Committee, said the training group is needed because there aren’t enough U.S. military advisers there now.

The plan notes that the top U.S. general in Afghanistan still wants some 10,000 or 11,000 additional U.S. forces next year, but it does not say whether Obama intends to fulfill that request now, sources said. That decision would come by the end of this year.

___

Associated Press writers Anne Gearan, Pamela Hess, Anne Flaherty, Lolita C. Baldor, Pauline Jelinek, Robert Burns, Matthew Lee and Richard Lardner contributed to this report.

Obama’s media blitz: Style over substance?

I fully expect the next "Law and Order" or "CSI" or "24" episode to feature an embattled president racing against time trying to boost national economic confidence. It will star, as himself, Barack Obama.

Then, we’ll see Obama singing on "American Idol," twirling on "Dancing With the Stars" and dissecting the American psyche while sitting on Oprah’s sofa.

In his unprecedented virtual town hall meeting on whitehouse.gov, Obama strode around the East Room totally at home with his microphone while batting softball questions (what about the nurses, what about the jobless and what about the next generation). A total of 92,925 people submitted questions of the what-are-you-going-to-do-about-education ilk two days after he held a news conference in the same room. They were the same questions desperate Americans asked Obama on the campaign trail.

His goal for this 24/7 media blitz? Reach every American with his message that we must teach our children to compete in high-skills jobs, provide health insurance for everyone, work toward energy independence and, most of all, persuade those recalcitrant Republicans and renegade Democrats in Congress to pass his $3.7 trillion budget.

It’s impossible to keep up with the financial twists and turns of this all-consuming recession. The up-again, down-again stock market does not make sense. Treasury Secretary Tim Geithner is either an all-but-fired nincompoop or a rising star with a head on his shoulders.

Our rage against AIG bonuses is either attributable to inchoate mob rage or reasoned reaction to incomprehensible greed. Capitalism is either dead or just taking a break. Obama is either recklessly spending money we don’t have (and never will have) or is carefully preparing the nation’s infrastructure for the future. More tax cuts are either essential or good money after bad.

The new GOP budget plan is — surprise, surprise — a return to the myopic Bush era of more tax cuts for the rich and more spending on defense and less on everything else.

If there was one overarching message out of Obama’s online town hall meeting (aside from the disproportional demand that Obama weigh in on whether legalized marijuana could boost the economy; he said no), it is that he holds no hope that this recession will end this year. Even if the picture is brightening, job creation and housing starts wont begin in earnest for many, many months.

Low-skill, low-wage jobs that went overseas will not come back, he candidly told a woman from Georgia. And they shouldn’t, he went on, because there will always be countries that pay less than America’s minimum wage, and Americans can’t live in this society on those wages, not even in the tent cities that are starting to spring up in warmer regions. The solution is to improve our schools so that our students are once again the most competent, most productive workers on earth.

(The issue of the productivity of millions of employees using their office computers during work hours to watch Obama was not addressed.)

Persistence, education and hard work are the virtues we should be striving for, he keeps saying.

That’s not bad advice for tumultuous times. But what that also means is that there is no silver bullet for our economic woes (and, despite what he says, his budget is not a one-size-fits-all panacea). Without jobs, all the other goodies are beyond our grasp.

We are almost certainly on the cusp of a new, back-to-our-roots economy where it’s individual hard work, imagination and innovation that each family and each small business must have to survive.

In other words, everything old is new again, and Obama is our new Dr. Phil, our new Benjamin Franklin, our new FDR; our new Pied Piper.

But, in the end, it will be up to us to put the pieces together again. And, that, too, is Obama’s 24/7 message: We’ve done it before; we can do it again. It’s all about hard work and confidence.

(Scripps Howard columnist Ann McFeatters has covered the White House and national politics since 1986. E-mail amcfeatters(at)nationalpress.com.)

Obama’s manipulated non-press conference

Here’s today’s puzzler. When is a press conference not a press conference?

The answer is:

When the person pretending to conduct the exercise picks those who will be allowed to ask questions ahead of time and then spends almost an hour artfully dodging any direct answer to a direct inquiry, essentially making a speech or, if you prefer as some analysts have suggested, filibustering.

That apparently is how Barack Obama sees the time-honored obligation of now and then exposing himself to the probing questions of the dwindling Washington press corps. So Tuesday night’s performance, the second since his inauguration, was merely a repeat of the first with long-winded answers that were both unresponsive and clearly designed to present his message over and over again to Americans he expected to be transfixed in front of their TV sets during broadcast primetime when that was the only thing playing. Has he never heard of cable?

If anyone doubted that the president is of that BlackBerry generation of young Americans whose basic source of information comes from a handheld electronic device or listening to sound bites, the fact that he virtually ignored the print press should dispel any such notion. He called on the representative of only one mainstream newspaper, The Washington Times, strengthening the belief that he considers struggling daily journals from Maine to Oregon increasingly irrelevant. Ironically, the major newspapers overwhelmingly supported his candidacy.

To show that he believes in media equality, he did call on Stars and Stripes, the Army daily; Ebony magazine; and Agence France Presse, the wire service propped up by the French government. He also gave the Spanish language TV network Univision an opportunity to be recognized. So much for The Washington Post and The New York Times, both of which hang on his every word and, of course, The Wall Street Journal, which has a large stake in reporting about his plans to revive the economy. The national daily USA Today also got the cold shoulder, as did the Chicago Tribune and Los Angeles Times.

The news value of these affairs never has been very high and at times the decorum of reporters, even in this most solemn and rarefied atmosphere, has not been above reproach. But even during testy questioning by belligerent reporters and equally sharp replies as was frequently the case during the administrations of Lyndon Johnson and Richard Nixon, there was at least an aura of authenticity unlike the contrivance of the current exercise.

Since George Washington, presidents have entered the office determined to manage the press. For most of George W. Bush’s tenure, the White House controlled every snippet of news in typical corporate fashion but never could put the clamps on the free wheeling press conferences. The current regime, however, has found a distinct way of doing that — just pick out 12 or 13 questioners before hand and ignore the rest.

Why do the un-anointed show up when they might just as well watch it on TV? That is, if television would be interested in broadcasting a much smaller gathering. By attending aren’t they lending themselves to a staged event? Of course they are. But hope springs eternal that lightning might strike or the camera will show them diligently taking notes.

It would be difficult to accuse Obama of totally ignoring traditional media, having made himself available for interviews to The New York Times and The Washington Post and taping appearances from Jay Leno to "60 Minutes." There is no doubt that he is self assured and far more comfortable in those settings than his immediate predecessor. He might be wise to remember, however, that the press conference, as unproductive news wise as it may seem, draws a far wider audience and is far more dignified than the "Tonight Show" where network officials didn’t have the grace to hold off the constant stream of commercials despite the fact they had the president of the United States at their disposal.

So now you know when a press conference is not really a press conference and you might remember when the next one comes around that you are watching the equivalent of a professional wrestling match.

(E-mail Dan K. Thomasson, former editor of the Scripps Howard News Service, at thomassondan(at)aol.com.)

We deserve better than Tim Geithner

Treasury Secretary Timothy Geithner nearly struck out Wednesday morning despite multiple opportunities to defend the dollar. Geithner’s narrowly averted gaffe was sadly typical, given the greenback’s shabby treatment these days.

While addressing a jam-packed meeting of the Council on Foreign Relations, Geithner answered Standard Chartered Bank’s Doug Smith who wanted the secretary’s thoughts on "the Chinese government proposal about a global currency." People’s Bank of China governor Zhao Xiaochuan would shift Earth’s reserve currency from the dollar to "Special Drawing Rights" (SDR), combining the dollar, Britain’s pound, Japan’s yen, and the euro. Call it the international "globo."

Geithner should have echoed his boss’ reaction to this idea. President Obama declared at his Tuesday-night press conference: "I don’t believe that there’s a need for a global currency."

Instead, Geithner rhapsodized about Zhao’s brilliance.

Geithner called Zhao "a very thoughtful, very careful, distinguished central banker. Generally find him sensible on every issue." Geithner added that Zhao’s idea is "designed to increase the use of the IMF’s Special Drawing Rights. And we’re actually quite open to that suggestion."

Strike one.

After Geithner swung at that slow ball and missed, moderator and former Treasury secretary Roger Altman pitched Geithner a soft ball.

Altman said, "A slew of news reports interpreted (Zhao’s) comments to suggest that the world needs a super reserve currency, and that the dollar, on some gradual basis, ought to be replaced in favor of that. And I wasn’t entirely clear what your response was."

Once again, Geithner lauded the man who wants to end the dollar’s starring role on the world stage. "He’s a really thoughtful, pragmatic guy, and he has a great record of credibility in China as a whole, so anything he’s thinking about deserves some consideration," Geithner gushed.

Strike two.

Beyond the CFR’s Park Avenue headquarters, traders quickly learned of Geithner’s shaky at-bat. The greenback’s value against the euro slumped 1.3 percent within 10 minutes of Geithner’s non-defense of the dollar. "That’s a huge currency move," observed one Wall Street veteran.

Giving him one more opportunity to prevent a strike out, Altman practically dangled the ball in Geithner’s wheel house, as if from a string.

"I’d like to ask one final question, in effect, on behalf of the market," Altman nearly pleaded. "It might be useful if you tried to clarify your earlier comment on the reaction to the central bank governor of China’s idea, and so let me ask the question this way. Do you see any change over the foreseeable future in the basic role of the dollar as the world’s key reserve currency, or the reserve currency?"

This time, Geithner’s bat smacked white leather.

"I think the dollar remains the world’s dominant reserve currency," Geithner replied. "I think that’s likely to continue for a long period of time."

Even after listening to Geithner’s otherwise sharp and witty dialogue with his savvy audience, it hardly instilled confidence to watch him require this much help to stand up for America’s currency.

"I wish Mr. Geithner would be clearer on the need for a strong and stable dollar, especially when we’re going to be issuing a lot of debt," former Treasury official and Encima Global president David Malpass told me. "He’s spent too much time talking up China’s yuan and now the SDR. I don’t see how that helps us attract capital to U.S. financial markets."

The Federal Reserve recently announced plans essentially to print $1.15 trillion to purchase mortgage-backed securities and Treasury bonds. President Obama’s budget would double down on the national debt, from $4.4 trillion today to $9.3 trillion in 2019. By then, the Congressional Budget Office estimates, the national debt will rise from 40.8 percent to 82.4 percent of GDP, a truly equatorial level of fiscal squalor.

The dollar needs a hug. That Secretary Geithner required former Treasury Secretary Altman’s adult supervision to discern this should inspire prudent Americans to start pricing wheelbarrows.

(Deroy Murdock is a columnist and media fellow with the Hoover Institution on War, Revolution and Peace at Stanford University. E-mail him at deroy.Murdock(at)gmail.com)

Our future will be a regulated one

The Obama administration proposes to vastly expand federal oversight of the U.S. financial system. There is broad agreement that a new, more powerful regulatory framework is needed. For the moment — at least, until the economy turns around — the laissez-faire, deregulatory types are in hiding.

The plan would establish federal regulation of the larger hedge funds — meaning their books would be open; derivatives trading — the downfall of several big investment houses; and large insurance companies — to avoid a repeat of the AIG flameout.

The administration also proposes "a systemic risk regulator," a federal agency charged with monitoring the overall financial system and having the power to impose capital requirements on the largest players and intervene to block high-risk activities.

Administration officials had earlier asked Congress for the power — similar to the power it now has to seize banks — to seize faltering financial institutions whose failure would threaten the broader system.

The administration’s lead advocates on the proposal are Federal Reserve Chairman Ben Bernanke, who in a departure from the traditional role of the nation’s central banker finds himself actively engaged in legislation, and Treasury Secretary Timothy Geithner, who, after a stormy start, seems to have found his sea legs. Certainly the calls for his resignation have subsided.

So far, the plan is lacking a few vital details — specifically, who is going to do this and how. The bill the administration sent to Congress is only 61 pages, a bare-bones outline in matters this complex. Indeed, one member of the Senate Banking Committee praised it as "a good first outline."

A great deal of this measure has been left up to Congress. Should the power be concentrated in a single, powerful new agency? Or should existing regulatory agencies be strengthened and made more collaborative in what Securities and Exchange Commission Chairman Mary Schapiro called "a college of regulators"? The Obama administration seems to favor turning the bulk of the task over to the Fed, but it legitimately may be asked if that will detract from the Fed’s principal task of safeguarding the nation’s monetary system.

Although it may not be politically popular, the architecture of this new regulatory system should be designed with considerable input from the financial institutions it will be overseeing. Having gotten us into this mess, they may have some worthwhile thoughts on getting us out.

Americans on Obama: Still too early to tell

Americans are furious at Wall Street bonuses and wearied by job losses, but many seem ready to give President Barack Obama more time to deal with the nation’s economic crisis.

After his second prime-time news conference to defend the decisions he’s made since taking office two months ago, Obama appears to enjoy the confidence — or at least the patience — of ordinary Americans anxious about the economy.

"I think he’s done a pretty good job so far, and I didn’t vote for him," said Jack Sizer, a Connecticut physician and management consultant, as he read the morning paper in a Cincinnati coffee shop.

"Doing something, even if it doesn’t work out, is probably a good thing. He’s taking action versus inaction," said Sizer, 71, a self-described conservative.

Across the country in Phoenix, Arizona, former mortgage banker Sean Klasen said he was not expecting miracles in Obama’s first 100 days in office — the traditional time frame many use to judge new American presidents.

"I think right now people are going to be willing to give him a chance, especially considering what we went through with the last administration," said Klasen, who has returned to college to train as an accountant after the housing meltdown cut short his mortgage career.

Obama has gone on the offensive in recent days to explain his economic goals and decisions, appearing on a popular late-night talk show last week in addition to his high-profile televised news conference.

The communications effort seems to have helped preserve the Democratic president’s approval ratings, which two separate polls show are hovering near a healthy 63 percent or 64 percent some 60 days after Obama took over the Oval Office.

Obama won 52 percent of the popular vote in November’s presidential election, defeating Republican John McCain.

In San Francisco, paralegal Sean O’Brien said he thought Obama’s performance on Tuesday night was "pretty good," especially given the challenges that face the country.

Since the recession began in December 2007, some 4.4 million jobs have been lost. More than half disappeared in the last four months alone.

‘A TREMENDOUS JOB’

"I think he is doing a tremendous job under extremely adverse circumstances. Yeah, the AIG thing was kind of a real disaster, but I anticipated there would be a few disasters," said O’Brien, 48. "With time things will get better."

Obama and others have come under fire for allowing employees at failed insurance giant American International Group to give out $165 million in bonuses after the company received a $180 billion government bailout, an example of Wall Street excess that hit a nerve across America.

In Overland Park, Kansas, financial manager Kimberly Tassone said that while she was disappointed Obama made little mention of the wars in Iraq and Afghanistan on Tuesday, she was pleased with his moves so far to address the financial crisis.

"I do think there has been a substantial amount of progress in the short duration of his presidency so far, but to say ‘Problem solved’ … I think that will take a long time," said Tassone, 32, a registered independent who voted for Obama.

But even supporters of Obama said it was difficult to know whether the decisions he has taken were doing any good.

Democrat Angela Shogren, out walking her dog Moby near the White House in Washington, said she watched Obama’s news conference with her husband and isn’t sure whether she is more or less encouraged by the actions of the president.

"It was a lot of the same, a lot of talk here and everywhere on what’s getting done and people are anxious to see results and I don’t think we are yet," said Shogren, 28, who is looking for a job in public relations, adding that her job hunt was going "slow."

And not everyone was willing to give Obama more time.

"I strongly disapprove of his actions so far," said Boston business executive Randy Waters, arguing that Obama didn’t seem to be able to collaborate with lawmakers in Congress.

"He says the Republicans have not provided alternatives. I’ve heard lots of alternatives from Republicans and even Democrats, but he discounts them as unacceptable," said Waters, who has a son in the Army due to be deployed to Afghanistan.

In a suburb of Dallas, McCain supporter and retired civil servant Robert Schultz said he didn’t bother to watch Obama’s news conference.

"I had no interest in what he was going to say. To me it doesn’t make any difference what he says. The only thing that’s constant from his campaign is that he’s going to tax some people, somehow, to increase welfare payments in the country," said Schultz, who watched a hockey game instead.

But even Schultz, who worries Obama is a socialist, said Obama needs more time before his presidency can be judged.

"It’s way too early."

(Additional reporting by Tim Gaynor in Phoenix, Andrew Stern in Chicago, Carey Gillam in Overland Park, Ed Stoddard in Dallas, Peter Henderson in San Francisco and Howard Goller in Washington; Editing by Eric Beech)

Geithner set to unveil regulatory crackdown

The Obama administration is proposing an extensive overhaul of financial regulations in an effort to prevent a repeat of the banking crisis last fall that toppled once-mighty institutions and wiped out trillions of dollars in investor wealth.

Officials said the administration will seek to regulate the market for credit default swaps and other types of derivatives and require hedge funds to register with the Securities and Exchange Commission.

Treasury Secretary Timothy Geithner was scheduled to outline the proposals in testimony Thursday before the House Financial Services Committee.

Administration officials provided details of the administration’s plan before the testimony only on condition of anonymity.

The program the administration was presenting to Congress will also include a recommendation for creation of a systemic risk regulator, possibly at the Federal Reserve, to monitor risks to the entire system.

The plan also includes a measure that Geithner and Federal Reserve Chairman Ben Bernanke discussed before the committee on Tuesday to give the administration expanded powers to take over major nonbank financial institutions, such as insurance companies and hedge funds that were teetering on the brink of collapse.

That power was aimed at preventing a repeat of the problems surrounding insurance giant American International Group Inc., which sparked a furor last week when it was revealed the company had distributed $165 million in bonuses to employees of its financial products group. The unit specialized in trading credit default swaps, the instruments that drove the company to near-collapse last fall.

The administration, pushing Congress to act quickly on its reform agenda, sent Congress a 61-page bill dealing with the expanded powers to seize control of nonbank institutions late Wednesday. The House Financial Services Committee, chaired by Rep. Barney Frank, D-Mass., has indicated it could move on the measure as early as next week.

However, it was unclear how fast the rest of the financial reform agenda might move through Congress. Geithner was providing only a broad outline of the other proposals, with many thorny details remaining to be worked out.

Administration officials promised that the remaining issues would be hammered out in consultation with Congress with the goal of getting legislation approved as quickly as possible.

The administration is proposing that hedge funds and other private pools of capital, including private equity funds and venture capital funds, be required to register with the SEC if their assets exceed a certain size. The threshold amount has yet to be determined, officials said.

The proposal on credit default swaps and other derivatives would require the markets on which they are traded to be regulated for the first time, and for the buying and selling of these instruments to be conducted in ways that will foster greater oversight.

Credit default swaps, which trade in a $60 trillion global market without government oversight, are contracts to insure against the default of financial instruments like bonds and corporate debt. They played a prominent role in the credit crisis that brought the downfall of investment banking giant Lehman Brothers Holdings Inc. last fall and nearly unraveled AIG, forcing the government to provide more than $180 billion in support.

Hedge funds, vast pools of capital holding an estimated $1.5 trillion in assets, operate mostly outside of government supervision. As the market crisis deepened last fall, hedge fund selling was widely cited as one of the reasons for increased volatility that pounded stocks and bonds. Hedge funds also suffered huge losses last year, notably from investments in securities tied to subprime mortgages.

The outline of the regulatory reform was being unveiled a week before President Barack Obama was scheduled to meet for discussions among the Group of 20 major industrialized and developing countries in London to assess what needs to be done to deal with the global financial crisis.

While the administration is pushing other nations to follow the U.S. lead in putting together sizable economic stimulus programs to jump-start global growth, many in Europe are resisting those calls and arguing that the United States needs to do more to toughen financial regulations. They believe the current troubles can be traced to lax regulation in the United States in such key areas as hedge funds and credit default swaps.

Requiring hedge funds to register would open their books to inspection by regulators. The SEC sought that authority several years ago but was stymied by a federal appeals court in 2006.

Hedge funds have grown explosively in recent years while operating secretively. They have lured an increasing number of ordinary investors, pension funds and university endowments — meaning millions of people now unwittingly invest in hedge funds indirectly.

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AP Business Writer Marcy Gordon contributed to this report.

Barack Obama, your inexperience is showing

President Obama, your inexperience is showing once again — as is that of one of your most visible employees.

One of the most common mistakes made by inexperienced politicians is inappropriate use of humor. Take, for example, joking about the depressed economy. If you’re a two-term state senator, maybe you can be excused for joking about the economy or laughing about it. When you’re president of the United States, it’s inexcusable. Yet, Obama made that exact mistake in an interview on CBS’ "60 Minutes." Interviewer Steve Kroft called him on it:

Kroft: "You’re sitting here. And you’re — you are laughing. You are laughing about some of these problems. Are people going to look at this and say, ‘I mean, he’s sitting there just making jokes about money –‘ How do you deal with — I mean, wh — explain."

Obama: "Well —

Kroft: " — the mood and your laughter."

Obama: "Yeah, I mean, there’s got to be –"

Kroft: "Are you punch drunk?"

Obama: "No, no. There’s got to be a little gallows humor to get you through the day. You know, sometimes my team — talks about the fact that if — if you had said to us a year ago that — the least of my problems would be Iraq, which is still a pretty serious problem — I don’t think anybody would have believed it. But — but we’ve got a lot on our plate. And — a lot of difficult decisions that we’re going to have to make."

And therefore, having a lot on one’s plate excuses that person from laughing about people being out of work? If you’re busy, it’s OK to joke about the economy being in a freefall and the ineffectiveness of the president’s stimulus package thus far? I don’t think so.

Inappropriate laughter is not the only mistake the president made during the "60 Minutes" interview. He also hyperbolized, yet again, about the recession. He said he believes the United States could undergo a further implosion of the financial system if Citigroup or AIG have more problems, which in turn could launch, "an even more destructive recession and potentially depression."

Such talk from the leader of the free world is immature if not downright inexcusable. Hasn’t he learned by now that his words have more impact since he took over the White House? A U.S. president’s words move markets up and down, with even more impact than those of the Federal Reserve chairman. A seasoned politician chooses words cautiously, recognizing their impact. For a guy who "gets" it, Obama doesn’t "get" that part of being president yet.

While he’s at it, he ought to tell his spokesman, Robert Gibbs, to loosen up a bit. At a White House briefing this week a CNN White House correspondent asked why the release of the so-called Geithner plan to free up the chokehold on lending that’s frozen the banking system, was done below the radar. This prickly response came from an obviously frustrated Gibbs:

"I guess he’s worried a little bit less about what the packaging is on the present, and more importantly, what’s inside of the box. I suppose we could have rigged out some flags and printed up some placards and cued up some old campaign music, but I think what’s important — maybe not for Washington reporters, but what’s more important for the American people is to get the details of a plan that works to get their bank lending money again."

I watched Gibbs deliver this not so subtle sermon and he seemed angry enough to bite off the reporter’s head. And the bit about "maybe not for Washington reporters" was so full of bull it almost exploded off the TV screen. To accuse someone else of being too Washington-oriented when you’re speaking for the president is the height of absurdity. There is no more inside-the-beltway crowd than the occupants of the White House and the west wing, of which Gibbs is certainly one.

So Obama, please recognize the importance of your words. And Gibbs, please understand you are a completely replaceable cog in the White House machinery and nothing more.

(Bonnie Erbe is a TV host and columnist. E-mail bonnieerbe(at)CompuServe.com.)