President Obama’s plan to stimulate the economy was “massive,” “giant,” “enormous.” So the American people were told, especially by TV news, during the run-up to the stimulus vote. Watching the news, you might have thought that the only question was whether the plan was too big, too ambitious.There's more in the op-ed, go read the whole depressing article. Krugman is painting a picture of an "out of touch" President. This is very disquieting because Obama is clearly a smart guy and has some excellent economic advisors around him, but somehow -- as Krugman points out -- Obama is clearly out of the loop on current economic data and the best of thinking by economists as to what is necessary to stop the complete collapse of the economy.
Yet many economists, myself included, actually argued that the plan was too small and too cautious. The latest data confirm those worries — and suggest that the Obama administration’s economic policies are already falling behind the curve.
To see how bad the numbers are, consider this: The administration’s budget proposals, released less than two weeks ago, assumed an average unemployment rate of 8.1 percent for the whole of this year. In reality, unemployment hit that level in February — and it’s rising fast.
Employment has already fallen more in this recession than in the 1981-82 slump, considered the worst since the Great Depression. As a result, Mr. Obama’s promise that his plan will create or save 3.5 million jobs by the end of 2010 looks underwhelming, to say the least. It’s a credible promise — his economists used solidly mainstream estimates of the impacts of tax and spending policies. But 3.5 million jobs almost two years from now isn’t enough in the face of an economy that has already lost 4.4 million jobs, and is losing 600,000 more each month.
There are now three big questions about economic policy. First, does the administration realize that it isn’t doing enough? Second, is it prepared to do more? Third, will Congress go along with stronger policies?
On the first two questions, I found Mr. Obama’s latest interview with The Times anything but reassuring.
“Our belief and expectation is that we will get all the pillars in place for recovery this year,” the president declared — a belief and expectation that isn’t backed by any data or model I’m aware of. To be sure, leaders are supposed to sound calm and in control. But in the face of the dismal data, this remark sounded out of touch.
And there was no hint in the interview of readiness to do more.
Monday, March 9, 2009
Krugman Says Obama Falls Short
In his latest op-ed in the NY Times, Paul Krugman socks it to Obama for not taking this gathering depression seriously. Just like Bush, Obama is behind the curve and seems oblivious to the fact that his actions are a dollar short and a day late: