Obama's Last Chance To Fix The Economy And Save His Presidency

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Paul Krugman chastises Obama for two errors on the economy:

  • First, a stimulus that was too small
  • Second, a defensive attitude now that it is clear that the stimulus was too small

On the second point, Krugman is referring to Obama’s rebuke of Joe Biden’s idiotic remark on the Sunday shows last week that the administration “misread” the economy.

In response to this remark, Obama said “there’s nothing we would have done differently.” 

That’s a perfectly reasonable comment: The economy wasn’t going to turn around this quickly regardless of what the administration did, and Biden was a numskull to suggest otherwise. 

But Obama’s remark sounded defensive.  And Obama’s attackers have already put him on the defensive by arguing that the stimulus was too big and didn’t work.  And the more defensive Obama is, the less political capital he’ll have to do things that might help fix the economy.  And now Obama is beginning to sound like Bush in refusing to admit mistakes that even his own people are owning up to….

And more important than the argument about the stimulus is the fact that Obama has blown much of his credibility on the economy with the American people.  In our opinion, maintaining this credibility was his single most important challenge in his first year.  If he is to maintain the support of the country and have a chance to do many of the other things he wants to do, he needs to rebuild it.

Krugman has some suggestions on how to do this.  They seem reasonable.  But the clock is ticking…

What Mr. Obama needs to do is level with the American people. He needs to admit that he may not have done enough on the first try. He needs to remind the country that he’s trying to steer the country through a severe economic storm, and that some course adjustments — including, quite possibly, another round of stimulus — may be necessary.

What he needs, in short, is to do for economic policy what he’s already done for race relations and foreign policy — talk to Americans like adults.

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