Economy Begs Priority from Obama

Daily News Article   —   Posted on November 7, 2008

(by Jon Ward and Christina Bellantoni, WashingtonTimes.com) CHICAGO – Greeted with the stock market’s worst two-day drop in 21 years, President-elect Barack Obama will take on voters’ No. 1 concern Friday by fielding questions about the nations economic turmoil in his first news conference since Election Day.

Mr. Obama, who spent part of Thursday being briefed by President Bush’s
top intelligence officer and talking with nine world leaders, will hold
a meeting with his transition team of 17 economic advisers, including
billionaire investor Warren Buffett, and then publicly tackle bad
financial news that has returned with a vengeance since his election
Tuesday.

On Thursday, reports of the worst month for retailers in 35 years
triggered a 443-point plunge in the Dow Jones Industrial Average that
added to a nearly 500-point loss Wednesday to complete the worst two
days for the Dow since 1987.

Retailers reported a “simply awful” month for sales in October and
forecast a dismal 1 percent growth rate for the critical holiday
season, during which most stores normally make about a quarter of their
yearly sales.

Mr. Obama’s schedule was announced as he locked down his first major
White House staff position when Rep. Rahm Emanuel, an Illinois Democrat
and former senior adviser to President Clinton, agreed to become his
chief of staff, and Mr. Bush vowed to help his successor navigate the
transition of power.

In an emotional South Lawn address to executive branch employees,
Mr. Bush warned that terrorists “would like nothing more than to
exploit this period of change to harm the American people” and pledged
that he, his Cabinet and executive branch employees would do all it
could for the incoming administration.

He choked up as he told the crowd that he would be “honored to stand
with [them] at the finish line.” Mr. Bush and first lady Laura Bush
will host the president-elect and his wife, Michelle Obama, at the
White House on Monday. Mr. Bush and Mr. Obama will meet in the Oval
Office to discuss the economy and the war in Iraq, while Mrs. Bush
takes Mrs. Obama on a tour of the residence.

In Chicago, Mr. Obama spent his second day as president-elect much
like the first: He worked out in the morning and then went to meetings,
but kept a low public profile.

But unlike Wednesday’s powwow with campaign staff, Mr. Obama’s first
round of meetings Thursday were with the nation’s top intelligence
officer, Director of National Intelligence Michael McConnell, CIA
Director for Intelligence Michael Morell and at least one other career
CIA employee.

The intelligence officials met with Mr. Obama at the FBI’s Chicago
field office and gave the next president his first briefing on the full
range of national security threats facing America. The briefing was
delivered in what intelligence officials call a sensitive
compartmentalized information facility.

Mr. Obama, like Republican presidential candidate John McCain, had
been briefed by Mr. McConnell before the election, but had not seen the
equivalent of what Mr. Bush sees six days a week, known as the
president’s daily brief.

The range of issues discussed, which the DNI’s office would not
discuss, was expected to include terrorist threats, the wars in Iraq
and Afghanistan, growing Russian belligerence, tensions in Pakistan,
and the issue of detainees at Guantanamo Bay, Cuba.

Throughout the day, Mr. Obama returned congratulatory calls from
leaders around the globe, including Prime Minister Kevin Rudd of
Australia, Prime Minister Stephen Harper of Canada, President Nicolas
Sarkozy of France, Chancellor Angela Merkel of Germany, Prime Minister
Ehud Olmert of Israel, Prime Minister Taro Aso of Japan, President
Felipe Calderon of Mexico, President Lee Myung-bak of South Korea and
Prime Minister Gordon Brown of Britain.

All of those leaders, with the exception of Mr. Olmert, will attend a global economic summit hosted by Mr. Bush.

On Thursday, the Dow closed at 8,695.79, a loss of 4.85 percent. The
tech-heavy Nasdaq, meanwhile, lost 47.89 points, or 5.03 percent, and
the broader S&P 500 fell 72.94 points, for a loss of 4.34 percent.

Consumers already have pulled back sharply, but a steady loss of
jobs threatens to cause an even greater falloff of spending in future
months. The Labor Department reported that the number of people
continuing to draw unemployment benefits jumped to a 25-year high. The
sharp rise in unemployment raised fears that a key jobs report to be
released Friday will show devastating numbers.

The Labor Department is expected to announce Friday that as many as 200,000 jobs were lost in October.

Long before the election, Mr. Obama had said the economic crisis would be his first focus and priority.

In announcing his chief of staff, the president-elect emphasized Mr.
Emanuel’s “several years in the private sector, where he worked on
large and complicated financial transactions.”

“That experience, combined with his service on the committees on
ways and means and banking, have given Rahm deep insights into the
challenging economic issues that will be front and center for our
administration,” Mr. Obama said.

Mr. Emanuel was credited with helping Democrats retake the House in
2006 during his chairmanship of the Democratic Congressional Campaign
Committee, and he rose to become the fourth-ranking House Democrat. He
was often mentioned as a future House speaker.

Some Republicans criticized Mr. Obama’s selection. The Republican
National Committee drew attention to Mr. Emanuel’s fearsome,
take-no-prisoners reputation, which earned him the nickname “Rahmbo.”

“Rahm Emanuel is a partisan insider who played a lead role in
breaking Washington,” RNC spokesman Alex Conant said. “Our nation will
be ill-served if Obama runs the White House the way ‘Rahmbo’ ran the
Democratic Congress.”

House Minority Leader John A. Boehner, Ohio Republican, called it an
“ironic” choice, given Mr. Obama’s promises to transcend partisanship.

Mr. Emanuel sought to extend an olive branch to the House
Republicans, who he said “serve with dignity, decency and a deep sense
of patriotism.”

“We often disagree, but I respect their motives,” Mr. Emanuel said.
“Now is a time for unity, and, Mr. President-elect, I will do
everything in my power to help you stitch together the frayed fabric of
our politics, and help summon Americans of both parties to unite in
common purpose.”

Sen. Lindsey Graham, South Carolina Republican and one of Mr.
McCain’s closest allies in the presidential campaign, said the Emanuel
pick was “wise.”

“Rahm knows Capitol Hill and has great political skills. He can be a
tough partisan but also understands the need to work together,” Mr.
Graham said.

Patrice Hill contributed to this report. Jon Ward reported from Washington.

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