Paul Krugman

Lately many people have been second-guessing the Obama administration’s political strategy. The conventional wisdom seems to be that President Obama tried to do too much — in particular, that he should have put health care on one side and focused on the econony.
I disagree. The Obama administration’s troubles are the result not of excessive ambition, but of policy and political misjudgments. The stimulus was too small; policy toward the banks wasn’t tough enough; and Mr. Obama didn’t do what Ronald Reagan, who also faced a poor economy early in his administration, did — namely, shelter himself from criticism with a narrative that placed the blame on previous administrations.  YOU HAVE GOT TO BE KIDDING ME??!!!

now showing complete cognitive dissonance, he IN THE SAME ARTICLE, writes the following.

The same can be said about policy toward the banks. Some economists defend the administration’s decision not to take a harder line on banks, arguing that the banks are earning their way back to financial health. But the light-touch approach to the financial industry further entrenched the power of the very institutions that caused the crisis, even as it failed to revive lending: bailed-out banks have been reducing, not increasing, their loan balances. And it has had disastrous political consequences: the administration has placed itself on the wrong side of popular rage over bailouts and bonuses.


Finally, about that narrative: It’s instructive to compare Mr. Obama’s rhetorical stance on the economy with that of Ronald Reagan. It’s often forgotten now, but unemployment actually soared after Reagan’s 1981 tax cut. Reagan, however, had a ready answer for critics: everything going wrong was the result of the failed policies of the past. In effect, Reagan spent his first few years in office continuing to run against Jimmy Carter.

Mr. Obama could have done the same — with, I’d argue, considerably more justice. He could have pointed out, repeatedly, that the continuing troubles of America’s economy are the result of a financial crisis that developed under the Bush administration, and was at least in part the result of the Bush administration’s refusal to regulate the banks.  WHICH NOT JUST TWO PARAGRAPHS ABOVE HE GIVES "o" A PASS??!!

Now for some logic.

George Will

One of conservatism's tasks is to discourage irrational exuberance—or any other kind of exuberance, for that matter. Today this task is not demanding because anxiety about the sagging economy and surging government debt is broad and deep.


Since the recession began in December 2007, Congress has passed two stimulus packages ($168 billion in February 2008 and $787 billion in February 2009), and last month the House passed a $154 billion jobs bill. The economy has been growing for more than six months. Yet job creation is sluggish.


Today's unemployment rate is 10 percent; the underemployment rate—the unemployed, plus those employed part time, plus those discouraged persons who have stopped looking for jobs—is 17.3 percent. Almost 40 percent of the unemployed have been so for seven months or more—which is not surprising: Congress continues to extend eligibility for unemployment benefits, apparently oblivious to the truth that when you subsidize something you get more of it.


There is no precedent for what the nation might be beginning to experience—a torpid recovery from a steep recession. Since World War II, the average growth rate in the first four quarters after a recession ended has been 6.6 percent, and then 4.3 percent for the subsequent five years. In 1982, the unemployment rate reached 10.8 percent; in 1983, the average quarterly growth was a sizzling 7.6 percent.
and

With prolonged high unemployment predicted, consumer spending is paralyzed by caution. With Washington experiencing prolonged hyperkinesis, businesspeople are paralyzed by uncertainty about what the rules and costs of commerce are going to be. What would a cap-and-trade carbon-control regime do to energy costs? What will be the costs of whatever the Environmental Protection Agency decides to do on the basis of its "endangerment" finding that carbon dioxide is a pollutant? What will health-care and tax costs be? Money cannot be free forever, so someday interest rates are going to change. Starting from zero, the change will be adverse for many people.