Measuring Obama's Shortfall

In his NY Times blog, Paul Krugman provides some numbers to quantify just how short Obama fell in trying a Keynesian approach to the 2008 financial panic:

First, even in January 2009 the CBO was forecasting an “output gap” — a shortfall of the economy’s actual production over what it could and should be producing — of more than $2 trillion over 2009-2010. That told you right there that an $800 billion stimulus, much of it consisting of tax cuts of dubious effectiveness, was likely to fall short.

There were also good reasons to believe that the slump would be prolonged, that the economy would need help over a protracted period. After all, the two previous recessions had been followed by long periods of jobless recovery, and there was every reason to expect a repeat. Moreover, we had international evidence showing that the aftermath of financial crises is a long period of high unemployment.

The point is that even in January 2009 it should have been obvious that the economy probably needed a really major push. Maybe that wasn’t possible politically; but it’s clear that there was a complacency in the White House that remains very hard to understand.

What is particularly disturbing was at the time and ever since Obama has claimed that his stimulus was "just the right size" needed to help America recover. This inability to face facts and be honest with the America people is why he has lost all credibility as a "leader". I can understand a Saddam Hussein, a Stalin, a Hugo Chavez, a Fidel Castro, etc. assuring their public that their actions were "just the right medicine". But you expect the leader of a functioning democracy to be honest.

Oh... maybe it is because Obama followed a Republican leader, Bush, who practiced the black arts of denying reality that Obama felt he too could pretend that black was white and that down was up.

What America desperately needs is a (a) an honest leader who (b) admits that 25 million are suffering joblessness and (c) tens of millions have lost or are losing their homes because of crimes on Wall Street and (d) that everybody else is facing years of poor job prospects and low investment returns because of fraud and corruption rife in America, especially in corporate headquarters and in the highest political offices in the land.