Krugman: The bad decisions of January 2009 will cast a shadow on America for years

[BurtWorm]

http://krugman.blogs.nytimes.com/2010/08/31/what-martin-wolf-said/

What Martin Wolf Said

Obama was too cautious in fearful times.

The bad decisions of January 2009 will cast a shadow on America for years, and quite possibly decades, to come. At this point, what more can those of us who feared this outcome, who tried desperately to get the White House to listen, say?

[Dark]

1. Obama has been rather disappointing. "Those who dare, win." So he won't be winning.

n/t

[Poboy]

2. Oh, he'll win (maybe a BOD Carlyle Group Appt.), but we the people will lose.

[Dark]

3. The republicans will win the midterms. And then everyone loses.

nt

[BrklynLiberal]

4. The possibility makes me physically ill....

[chill_wind]

5. He's saying we're truly f#cked, isn't he?

[BurtWorm]

6. He is.

And that we didn't have to be.

[chill_wind]

15. I think Gibbs admitted as much a couple days ago, too.

(bold and italics emphasis mine)

Q Is the reason the President is not pushing for a bolder move on the economy because he doesn’t believe there is one, or because he doesn’t think he could get it through Congress?

MR. GIBBS: Well, Jake, I think you will hear the President -- you heard him today after meeting with his economic team, and you will hear him over the course of the next several weeks outlining a series of ideas, some of which are stuck in Congress and some of which we continue to work through the economic team, that will be targeted measures to continue to spur our recovery and to create an environment in which the private sector is hiring.

Q But these are smaller-bore type proposals. These aren’t $787 billion stimulus packages.

MR. GIBBS: No, they’re not. But let’s understand -- when you mention small bore -- some of you probably saw this article today -- “Small businesses sit in holding pattern.” “Small businesses have put hiring, supply buying, and real estate expansion on hold as they wait out the vote on a small business aid bill that is stalled in the Senate earlier this summer.” Right?

As the President said in the Rose Garden, 60 percent of our job losses have come from small business. Small businesses are waiting for the Senate to act on a bill that would cut their taxes and provide them greater loans and investment opportunities with which to expand.

The Republican Party talks a lot about their support for and their helping of small business, and I think the question that the President put toward them today is, if that’s what you support, why are you standing in the way of something that small businesses acknowledge would help with their hiring, with their purchasing, and with their expansion?

Q Okay, but the question I asked was, do you think -- does the President think that there should be a bolder move taken beyond a $30 billion small business lending initiative --

MR. GIBBS: Well, again, I think --

Q -- and there aren’t the votes for it, or he just didn’t think there is such a thing?

MR. GIBBS: I think, Jake, I think the President mentioned several ideas today that he believes are important to continue that recovery that we will pursue. I think these will be areas and initiatives that are targeted towards spurring recovery and creating an environment for hiring, not some --

Q But does that mean he believes that that is the right approach, or he believes that it’s the only politically possible approach?

MR. GIBBS: Well, look, I don't think there’s any -- I think there’s no doubt that there are -- there’s only so much that can be done.

Q Not having to do with politics?

MR. GIBBS: Not having to do with politics.

http://www.whitehouse.gov/the-press-office/2010/08/30/press-briefing-press-secretary-robert-gibbs-8302010

Translation: We're truly f*cked.

[BzaDem]

7. Krugman of course glosses over the fact that a bigger stimulus likely wouldn't have actually passed.

He is correct that 787 billion wasn't enough, but that doesn't mean that anything significantly more than 787 billion was actually possible (or that it wouldn't have resulted in 0).

[depakid]

10. You don't know that at all- and the fact is that the administration didn't even try

so now they can't even say "we warned you and told you so."

Screwed yet again for failing to stand up and fight -and preemptively conceding to the FAIL wing of the party

btw: There's EVERY reason to believe that under the circumstances- with Obama and the Dem's political capital, they could have taken their case to the people and gotten the package that they wanted.

Indeed- some have said- and they may be correct, that the administration DID get what they wanted (unfortunately, they proved to be less than competent with the math).

[depakid]

8. Yep- and it didn't take Nostradamus to see what was coming

Those of us who did were roundly ridiculed by the the usual suspects.

The failure to provide much more federal aid to the states (as opposed to slashing what was in bill already) was a big if not a bigger mistake than failing to adequately plug the output gap.

Now not only have those chickens come home to roost in America- but the very economic philosophies that could still help have been called into question.

Spent the first week or two of February 2009 pretty damned depressed at the process, poor judgment and the prospects of those decisions.

[xchrom]

9. Recommend

[Fumesucker]

11. I'm sure this is pure coincidence..

And I'm serenely assured that Obama has no plans to join this group.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x9061188

Richest lawmakers grew wealthier as economy faltered

http://news.yahoo.com/s/yblog_upshot/20100901/pl_yblog_...

Sen. John Kerry - D/MA -- $188 Million
Rep. Darrell Issa - R/CA -- $160 Million
Rep. Jane Harmon - D/CA - $152 Million
Sen. Jay Rockefeller - D/WVA -- $83 Million
Rep. Michael McCaul - R/TX -- $73 Million
Sen. Mark Warner - D/VA -- $70 Million
Rep. Jared Polis - D/CO -- $56 Million
Rep. Vern Buchanana - R/FL - $53 Million
Sen. Frank Lautenberg - D/NJ -- $49 Million
Sen. Diane Feinstein - D/CA -- $46 Million

[southmost]

12. what about the bad and even worse decisions of the 80s and 90s

or 2000s ? those effects will be felt for decades

[chill_wind]

13. "Well Mr. President, this is your 'holy shit moment'. (Christina Romer Dec 2008)

Calculated Risk didn’t even have to look outside of the Administration–at least as it existed when people were making predictions about the recovery act–to find an economist who had enough of a grasp on what was happening.

How about Christina Romer (the chair of the Council of Economic Advisers) From Ryan Lizza at the New Yorker:

At the December <2008> meeting, it was Romer’s job to explain just how bad the economy was likely to get. “David Axelrod said we have to have a ‘holy-shit moment,’ ” she began. “Well, Mr. President, this is your ‘holy-shit moment.’ It’s worse than we thought.” She gave a short tutorial about what happens to an economy during a depression, what happened during previous severe recessions, and what could happen if the Administration didn’t act. She showed PowerPoint slides emphasizing that the situation would require a bold government response.
…
The most important question facing Obama that day was how large the stimulus should be. Since the election, as the economy continued to worsen, the consensus among economists kept rising. … Romer had run simulations of the effects of stimulus packages of varying sizes: six hundred billion dollars, eight hundred billion dollars, and $1.2 trillion. The best estimate for the output gap was some two trillion dollars over 2009 and 2010. Because of the multiplier effect, filling that gap didn’t require two trillion dollars of government spending, but Romer’s analysis, deeply informed by her work on the Depression, suggested that the package should probably be more than $1.2 trillion.

http://emptywheel.firedoglake.com/2010/08/31/nothing-to-be-done-but-blame-republicans/

http://www.calculatedriskblog.com/2010/08/gibbs-housing-tax-credit-not-high-on.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+CalculatedRisk+%28Calculated+Risk%29

http://www.newyorker.com/reporting/2009/10/12/091012fa_fact_lizza

[MilesColtrane]

14. Link to Martin Wolf piece without having to register at Financial Times:

http://www.cbsnews.com/stories/2010/08/31/opinion/main6823806.shtml