In reading Nobel Prize Winning Economist Paul Krugman one cannot but agree with him. That said, Krugman’s placing the responsibility of the too small stimulus spending, Healthcare bill that did not include a public option, single payer system, and insurance companies with more business mostly on the president is unfair.
The President while able to stop legislation more easily with a veto, is less able to get desired legislation passed. Moreover, with a fractured Democratic caucus that include Blue Dogs (Republican Lite), I honestly think he got the best he could. Having a willfully incompetent press that allowed conservative talking points to be aired many times with more credulity than those from rational thinkers poisoned the American citizens at large with misinformation.
It does not matter how great a president, those obstacles cannot be overcome. If the Republicans takeover, which in effect will be a mandate Americans are sending, then this is a mandate that will further damage the economy. Hopefully sensible Democrats are able to frame the debate in the right context for 2012.
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My Book: As I See It: Class Warfare The Only Resort To Right Wing Doom
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This is what happens when you need to leap over an economic chasm — but either can’t or won’t jump far enough, so that you only get part of the way across. If Democrats do as badly as expected in next week’s elections, pundits will rush to interpret the results as a referendum on ideology. President Obama moved too far to the left, most will say, even though his actual program — a health care plan very similar to past Republican proposals, a fiscal stimulus that consisted mainly of tax cuts, help for the unemployed and aid to hard-pressed states — was more conservative than his election platform.
A few commentators will point out, with much more justice, that Mr. Obama never made a full-throated case for progressive policies, that he consistently stepped on his own message, that he was so worried about making bankers nervous that he ended up ceding populist anger to the right.
But the truth is that if the economic situation were better — if unemployment had fallen substantially over the past year — we wouldn’t be having this discussion. We would, instead, be talking about modest Democratic losses, no more than is usual in midterm elections.
The real story of this election, then, is that of an economic policy that failed to deliver. Why? Because it was greatly inadequate to the task.
When Mr. Obama took office, he inherited an economy in dire straits — more dire, it seems, than he or his top economic advisers realized. They knew that America was in the midst of a severe financial crisis. But they don’t seem to have taken on board the lesson of history, which is that major financial crises are normally followed by a protracted period of very high unemployment.
If you look back now at the economic forecast originally used to justify the Obama economic plan, what’s striking is that forecast’s optimism about the economy’s ability to heal itself. Even without their plan, Obama economists predicted, the unemployment rate would peak at 9 percent, then fall rapidly. Fiscal stimulus was needed only to mitigate the worst — as an “insurance package against catastrophic failure,” as Lawrence Summers, later the administration’s top economist, reportedly said in a memo to the president-elect.
But economies that have experienced a severe financial crisis generally don’t heal quickly. From the Panic of 1893, to the Swedish crisis of 1992, to Japan’s lost decade, financial crises have consistently been followed by long periods of economic distress. And that has been true even when, as in the case of Sweden, the government moved quickly and decisively to fix the banking system.
