So this is the new meme.
The reason the economy is stuck in a rut is that Obama failed to act aggressively enough stimulus-wise early on to make a difference in the trajectory of the economy.
Krugman’s been saying this forever, and now Martin Wolf of the FT is saying the same thing. And Wolf, like Krugman, has the benefit of having called for way more stimulus early on.
On such chances the wheel of history turns. But this time was different: the crisis brought Barack Obama to power close to the beginning of the economic collapse. I (among others) then argued that policy needed to be hugely aggressive. Alas, it was not. I noted on February 4 2009, at the beginning of the new presidency: “Instead of an overwhelming fiscal stimulus, what is emerging is too small, too wasteful and too ill-focused.” A week later, I asked: “Has Barack Obama’s presidency already failed? In normal times, this would be a ludicrous question. But these are not normal times. They are times of great danger. Today, the new US administration can disown responsibility for its inheritance; tomorrow, it will own it. Today, it can offer solutions; tomorrow it will have become the problem. Today, it is in control of events; tomorrow, events will take control of it. Doing too little is now far riskier than doing too much.” This was right.
If Obama wants to get re-elected, this kind of talk needs to end pretty fast. That’s why more and more, we suspect that after the election, the Treasury will engage in some kind of Hail Mary, and do an end run around the GOP-led Congress to stimulate housing. Obama will have no other choice. No other short-term fix is on the table.
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