National Journal's Ron Fournier and Ronald Brownstein interviewed President Obama on October 19. The full transcript follows.
NJ Let me start by asking you about the issue that’s most on the minds of Americans: the economy. I’m wondering, absent any big change in policy, is there anything you see on the trajectory that would cause the economy, particularly jobs, to grow faster in the next year than they have been growing in the last year?
OBAMA Well, the American economy is massive, it’s complicated, and so anybody who says they know exactly what the economy will do is probably overestimating their foresight. What we know is that we’re coming out of the worst financial crisis and the worst recession since the Great Depression. So we’ve suffered a significant body blow. Because of the steps we’ve taken, the economy is now growing again, and we’ve seen nine consecutive months of private-sector job growth. Businesses are profitable and consumers are cautious, but they’re spending. If businesses got more confident about demand being out there to justify their investments, and in turn that led to slightly increased spending, which then created a virtuous cycle, then you could see significant improvement in 2011 over 2010. But given the hole that we’re in, it would still take a significantly long time to make up for the 8 million jobs that have been lost, so that’s why we think it’s still important to take those extra measures that can improve demand, give small businesses more confidence in terms of their ability to get financing. The steps we took in terms of cutting capital gains tax for start-ups, trying to accelerate business investment, allowing them to depreciate faster if they make those investments next year, those kinds of measures can potentially make a difference because even if all goes well, we lost 8 million jobs. The housing market is still very weak. And those headwinds are going to keep on blowing for some time to come.
NJ You talk a lot about how this is the worst financial crisis since the Depression. We’re also going through an economic restructuring unlike anything we’ve seen in 100 or so years, going from one type of economy to another. Given those two pillars, is either party, is either your party or the Republican Party really doing enough to address this? Even if you get everything you want in the stimulus package, is that enough going forward?
OBAMA Well, here’s what’s true. We’re not just going through a restructuring over the last couple years; we’ve been going through a restructuring for the last decade, the last 15 years.
NJ Fair point.
OBAMA It got papered over because of the housing bubble and easy credit. So we now know that between 2001 and 2009, middle-class families lost 5 percent of their income. It’s part of the reason why they maxed out on their credit cards and took out so many home-equity loans. We know that job growth was more sluggish between 2001 and 2009 than at any time since World War II. But the housing boom in a lot of places across the country put folks who had lost their jobs in manufacturing to work in construction, and now the tide’s washed out, and those folks are really suffering. So you’re exactly right that we’ve got some structural issues that we put off for a long time, and we’re not going to transform overnight. What we have tried to do is to make sure we get started on some of those, that we get started addressing some of those structural issues knowing that the payoff is not going to be immediate, it’s not going to be next year. The best example of that is probably the education issue. We used to rank first in the proportion of college graduates; we now rank ninth. We used to be at the top of the heap in math and science; we’re now 21st and 25th in math and science when you look at the performance of 15-year-olds. So what we’re doing with Race to the Top, what we’re doing in terms of expanding student-loan programs, all those steps are designed to make sure that in this highly competitive environment, we’re going to be better positioned. When it comes to manufacturing, the investments we made in research and development, particularly in sectors like clean energy that show promise for the future. Those aren’t going to pay off immediately, but if we start positioning ourselves so that we’re a leader in advanced battery manufacturing, we’re a leader when it comes to solar and wind energy, then we have the opportunity once again to make up some of that ground that we lost over the last decade.
NJ But when you look at The Atlantic [story about] "the end of jobs"–when you think about what you’re trying to get done, is it enough?
OBAMA Here’s what I’d say, is that it took us several decades of neglect to get to where we are. It’s going to take us time to get out of the hole that we’re in. I would still not trade our position with any other countries in the world because we still have these enormous assets–the best universities and colleges in the world, the most productive workers in the advanced world, the most entrepreneurial culture in the world. Those advantages can make up for a lot. And you know, you’ll recall that back in the '80s, everybody was sure that Japan was going to clean our clock. We had a similar sense of distress about America’s position in the world. And next thing you know, in the mid-'90s, we took off again and left everybody else behind. I have confidence in our ability to adapt again. It does mean, though, that this election matters, precisely for the reason that you’re pointing out. If we make a decision right now that we potentially cut education spending by 20 percent, that’s going to make a difference in terms of how well we’re positioned to compete 10 years from now.