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In his recent interview with CNN’s John King, President-elect Obama has the right idea about what needs to be done as quickly as possible (in as “short a run” as possible) for the American worker and in particular manufacturing workers who cannot count anymore on jobs making traditional fossil-fuel-powered automobiles.

But Obama also understands that the U.S. economy has a short-term problem that’s different from our long-term challenges, and that his Administration will need to follow two big, bold, yet seemingly opposite policy strategies as the economy moves from immediate countercyclical “life support” to an emergence on the other side of this recession that has to set us on a more sustainable path for the longer run.  From the CNN transcript of the same January 16th interview (emphasis added):

[John] KING: You mentioned solutions, the stimulus plan, the recovery plan, as you call it, the bailout plan, the TARP program, as they call it in Washington, you get will that money.

Hard to find anybody who disputes the urgency, but you find a lot of people worried about the price tag.

OBAMA: Yes, and they should be.

KING: One of your key allies in Congress said just yesterday, $850 billion in stimulus may be a first step. They might need more.

You know what the bankers are saying on Wall Street, that the financial institutions are still losing money, many of them been holding onto that federal money even, and they say, it might not be enough $700 billion might not be enough.

OBAMA: Right. Right.

KING: Are you going to have to, in your early days, draw a line, say, we can’t keep printing money; this is it.

OBAMA: Here’s what we’re going to have to do.

We’ve got distinguish between short term and long term. Short term, the most important thing is to put people back to work, all those folks that you had breakfast with. If they’re working, that means they’re paying taxes. That means that they’re buying goods and services. And the economy, instead of being on a downward spiral, starts back up on an upward spiral.

But what we also have to recognize is, is that the deficit levels that I’m inheriting, over $1 trillion coming out of last year, that that is unsustainable. At a certain point, other countries stop buying our debt. At a certain point, we’d end up having to raise interest rates and it would end up creating more economic chaos and potentially inflation.

So, what we want to do is to say that instead of just printing more money, let’s look at medium term and long term. Let’s get a handle on Social Security. Let’s get a handle on Medicare. Let’s eliminate waste in government where it exists. Let’s reform our Pentagon procurement practices.

All those things are going to have to be done in concert. And that’s going to be tough. It’s going to be tough, because the only way to do it is if Democrats and Republicans both are willing to give up a little bit of what they consider to be their favorite programs. And we’re going to have to look at all this stuff in a fairly short period of time, because we’re not going to have five or 10 or 15 years to kick the can down the road. We’ve got to get started right now.