What to learn from Obama’s ‘teachable moment’

So I was in the East Room of the White House for what appears to have been a minor moment of US domestic history..

I was about five metres away from the president when he said that the Cambridge police ‘acted stupidly’ having mused on healthcare economics for an hour.

This is what I, as stand-in DC correspondent and economics-not-politics specialist, have learnt from what President Obama himself calls a ‘teachable moment’.

1. President Obama jumped the gun on the ‘stupid’ comment. To be clear though, his first comments were heavily caveated, and conditional.

He said that these sorts of arrests can be seen through the prism of police mistreatment of young African-American and Latino men, even when there is no racial issue. That is clearly true. It is true in Britain too.

Even if you believe it is justified to use racial profiling for Section 44 stop and searches under the Terrorism Act, that is clearly going to create a rational reaction from say, any young Asian man, to avoid the police outside train stations.

2. There are substantial racial undercurrents still whirring around America in regard to the president. There is a silent anger in ‘Palinamerica’ that is susceptible to frankly ludicrous arguments that see the president’s plan for universal healthcare as a backdoor attempt to, for example, gain reparations for slavery

Ironically poor rural white America probably has an awful lot to gain from healthcare reform. President Obama is hemmed in by these wild attacks from the right, in a way that President Bush would never have felt constrained by the left.

Will Obama choose to take these people on? If he waits he might find himself without majorities in Congress and unable to realise much substance from his message of ‘change’. (Oh, and 225 who got over $5 million, and 37 who scored above $10m, and that’s excluding JPMorgan).

3. The longer the recession goes on, the greater the danger for President Obama of achieving little. He was elected on the coat-tails of a collapsing financial system. So far the most tangible beneficiaries of the bailouts that he supported or enacted appear to be 3,167 bankers in government backed banks who gained million dollar bonuses (oh, and 225 who got over $5 million, and 37 who scored above $10m, and that’s excluding JPMorgan).

The anger about this brewing. Small wonder that today the president was gripping on to better-than- expected GDP numbers that showed a recession that is easing, but that the economic hand he inherited was even worse than thought.

Naturally, the president says this alleviation of the downturn is ‘measurably attributable’ to the Recovery Act of stimulated spending. They have ‘put the breaks on recession’, he said today. Yet economists say the economy needs to be growing by three per cent a year until the jobs market turns the corner. That seems a long way off.