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Martin Wolf looks back, and rues what will be, going forward:

Suppose that the US presidential election of 1932 had, in fact, taken place in 1930, at an early stage in the Great Depression. Suppose, too, that Franklin Delano Roosevelt had won then, though not by the landslide of 1932. How different subsequent events might have been. The president might have watched helplessly as output and employment collapsed. The decades of Democratic dominance might not have happened.

Obama took the right policy steps to stabilize the economy, he was just too timid.  Without intervention, Wolf says, recent figures show GDP would have dropped 12 per cent instead of 4 per cent; unemployment would have peaked at 16.5 per cent, instead of 10 per cent.

We can argue all we want about whether Democrats could have passed a bigger stimulus, or one focused more effectively on spending instead of tax cuts, or whether trying to pass a better bill was worth the risk of failing to pass anything at all. You can't prove anything from what didn't happen, so we'll never know.

But looking forward, the political consequences of what was done are more predictable, and they'll be dire, for Democrats, and for the country:

So what is going to happen? I assume that, after the midterm elections, resurgent Republicans will offer new tax cuts and ignore the fiscal deficits. They will pretend that this has nothing to do with any reviled stimulus, though it is much the same thing – increasing fiscal deficits, thereby offsetting private frugality. That would put the administration on the spot. It would have to choose between vetoing the tax cuts and accepting them, so allowing the Republicans to get the credit for their "yacht and mansion-led" recovery. Any recovery is better than none. But it could have been much better than this. Those who were cautious when they should have been bold will pay a big price.

So Republicans and their anti-government, anti-regulation, anti-public spending approach will get the credit for reviving the economy to whatever extent it gets revived, with stimulus that is not called stimulus, deficits that are forgotten, tax cuts that increase income inequality, and public spending that primarily benefits the wealthy and powerful.

Krugman concurs:

What Martin Wolf Said

...The bad decisions of January 2009 will cast a shadow on America for years, and quite possibly decades, to come.

I don't count Obama out quite yet.  He fought ferociously to win the primary in 2008. But he doesn't seem to be learning anything from the failure of his bipartisanship, the failure of his trust that Republicans care more about the country than about power, and his failure to "politick" as part and parcel of policy.

Maybe two years with a Republican House and Senate might smarten him up on that score, if anything will.

Originally posted to Th0rn on Wed Sep 01, 2010 at 01:49 AM PDT.

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Comment Preferences

  •  You can get (0+ / 0-)

    around FT's subscription wall by googling the article title: Obama was too cautious in fearful times

    Or try this link

  •  Sorry but alhis is b/s. (2+ / 0-)

    You say 'we'll never know' if Obama coulda got more or different.  Then blame him for not getting that.

    I call bullshit.

    You're first point was correct: We don't know if it could have been any different.  As much as we all wish otherwise, the facts strongly suggest it could not.  To mention just 2 rather big facts: the Senate CUT the stim in order to get the 3 Rethug votes needed.  For another, Lie-berman threatened to filabuster his own 8 year proposal.

    All this other second guessing is cover-your-ass excuses and pie-in-the-sky utopian castle-building.
    Deal with what is before you start impeaching him for what might be or might-maybe-probably-not-but-who-knows could have been.

    •  point, counter-point (0+ / 0-)

      the Senate CUT the stim in order to get the 3 Rethug votes needed.

      Republican votes were not needed to pass a stimulus through the Senate.  It could have been passed using the reconciliation process, which requires a simple majority.  But this was not attempted because the White House insisted on trying to get Republican votes on the stimulus.  Moreover the administration low balled the stimulus from day one, refusing to seek a large enough bill to have a lasting impact on the economy.  There are no certainties, but given the political dynamics at play ,it is reasonable to believe that if Obama had ignored the Republicans, enforced discipline in his own party, and publicly advocated for a larger stimulus, that he would have been successful in securing a larger and more effective stimulus package.

      Lie-berman threatened to filabuster his own 8 year proposal

      The issue of reconciliation also addresses this point, but there is another matter which should be raise in relation to it.  Lieberman has influence in the political process today because Obama decided to embrace him, instead of breaking him.  Obama should have demanded he be stripped of his chairmanship and pushed out of the democratic caucus after he supported the Republican candidate in the Presidential election.  Obama's refuse to punish Lieberman for his betrayals has had a deleterious effect on party discipline, which has directly contributed to the senate's inability to pass legislation.  Many bills have been stalled not due to Republican obstructionism, but rather to obstructionism by Conservative Democrats.  This is a leadership failure on Obama's part as much as on the leadership in the Senate.

      When you vote, you are exercising political authority, you're using force. And force my friends is violence. The supreme authority...

      by Thought Crime on Wed Sep 01, 2010 at 08:21:36 AM PDT

      [ Parent ]

      •  <sigh> Wishful thinking vs. facts. (0+ / 0-)
        1. Reconcilation can not be used to increase the deficit, which means stim could not pass by same.

        As for HIR, there simply were not the votes for medicare-for-all after Lie-berman's betrayal played out.  Heck, there almost weren't the votes for what we got. Perhaps, IF Obama had insisted and staked his entire Presidency on this 1 narrow issue, and IF Reid had obliged, and IF the caucus had agreed... but that exactly the 'blame him on the basis of unknowable/unproveable specualtion' I call b/s on.

        1. Obama couldnot 'break' Lie-berman.  

        Only the D caucus could/can.  They do not want to.  Even with Lie-berman's vote, stim and HIR - heck, even what should have been a non-controversial unemployment benefit extension - barely based.

        Besides, your complaints/'might-have-beens' are beyond Obama's- or any Pres's - power.  The relevant Congressional body and only them decides them - and almost all the speculative solutions/criticisms I have seen on this blog.  This hold true for the House as well, remember the nail biter on HIR because of Stupak?  And their egos are nothing compared to those in the Senate.

        Like it or not, our government is one of divided power and Obama was elected before the worst was felt, not after the country being prostrate for 4 years. It may well be that these things could have been different at the margins.  But it would only be marginal changes. Perhaps if he had asked for $1.5 T in stim the critics would cut him slack.  But don't kid yourself that he would have gotten much more than he did.

  •  so what you're saying is it's a good thing (1+ / 0-)
    Recommended by:
    amk for obama

    to have the repubs take the congress so that it toughens up obama? Since it's all his fault and stuff?

    So instead of going out there and trying to pick up a mop and help keep the congress in decent hands, we should have a pre election whinefest?

    The Great Recession is a happy happy joy joy time to drop your obsolete skills and train for new ones.

    by doinaheckuvanutjob on Wed Sep 01, 2010 at 03:29:54 AM PDT

    •  decent hands? (0+ / 0-)

      Whose hands would those be?  The Democrats who sold us out on health care reform, the Democrats who sold us out on the stimulus, the Democrats who sold us out on job creation, or the Democrats who sold us out on credit card reform?

      When you vote, you are exercising political authority, you're using force. And force my friends is violence. The supreme authority...

      by Thought Crime on Wed Sep 01, 2010 at 08:11:48 AM PDT

      [ Parent ]

    •  No (0+ / 0-)

      It's about trying to keep the record straight so it doesn't get misused to make things even worse going forward. As Krugman says:

      Why do people like me feel the need to revisit the fateful decision to go for an underpowered stimulus right at the beginning of the Obama administration? It’s not about "I told you so", or at least not mainly. It’s about the economic narrative, which will matter long after the current players are off the scene.

      The way the right wants to tell the story — and, I’m afraid, the way it will play in November — is that the Obama team went all out for Keynesian policies, and they failed. So back to supply-side economics!

      The point, of course, is that that is not at all what happened. A straight Keynesian analysis implied the need for a much bigger program, more oriented toward spending, than the administration proposed.

      etc.

      So, no, not a good thing, just looking for any faint glimmer of hope in the midst of the bad that's coming.

      •  I don't see how that is helpful. (0+ / 0-)

        We have an election to win, not whine.

        The Great Recession is a happy happy joy joy time to drop your obsolete skills and train for new ones.

        by doinaheckuvanutjob on Wed Sep 01, 2010 at 02:26:12 PM PDT

        [ Parent ]

        •  If you don't see it (0+ / 0-)

          just go ahead and do what you think is important. Leave this part to those who do see it and stop trying to get them to STFU.

          •  That's the other extreme, (0+ / 0-)

            and it always comes to that. One side says don't tell me STFU and the other says everything is hunky dory, don't criticize. I don't agree with either of those positions. However, now that an election is coming soon, I do think it's time we focus on winning it. That doesn't mean silencing criticism at all. But it does mean asking 'is this helpful?'. If people are posting repetitive, broken record whines that demoralize, then they deserve to be questioned and confronted on that. I certainly think many of your diaries are great and worthwhile, but I don't see how today's helps. That's what I asked. How does this help?

            The Great Recession is a happy happy joy joy time to drop your obsolete skills and train for new ones.

            by doinaheckuvanutjob on Wed Sep 01, 2010 at 04:22:10 PM PDT

            [ Parent ]

            •  How does this help? (0+ / 0-)

              I told you. It's about pushing back against the GOP's economic narrative that Keynesianism is wrong and in fact the problem. Cheerleaders for Obama The Great Progressive just help feed their noxious narrative.

              If he did everything right, and couldn't have done anything differently, couldn't possibly have pushed for more progressive legislation, that doesn't leave much room for improvement in future, does it? If you're actually in favor of getting progressive change someday, you can't just blindly support, you have to criticize.

              You'll read no whining from me, ever. Everything is about helping push for better and more progressive policy. I don't believe in telling anyone to STFU and I don't believe in tolerating anyone who does. I fully support you going and getting out your mop if you think that's what's most important right now. Do me the courtesy of leaving me to go after what I think is most important.

  •  Your concern for obama's backbone duly noted. (1+ / 0-)
    Recommended by:
    thoughtful3

    So, what did Obama do or didn't do today to piss you off ?

    by amk for obama on Wed Sep 01, 2010 at 03:56:53 AM PDT

  •  President Obama will be forced to veto (1+ / 0-)
    Recommended by:
    laker

    He will be put into a position where he will have to veto all the Bush Tax Cuts - including those on the middle class.  This will hurt some people.

    Personally the Bush Tax cuts are worth less than $10 per week in my check and I am more than willing to pay the extra $10 to make the Rich pay their fair share.  But people with these marriage breaks and child credits better be ready to credit the Republicans for cancelling their Bush Tax Cuts because the Republicans will insist the Rich be included.

  •  Has his bi-partisanship really failed? (0+ / 0-)

    If you think the point of it was to garner Republican support for enacting substantive reforms, then, by and large, it has.  Sadly, I have come to the conclusion that Obama is smart enough to know that was never going to work.  This leads me to a different conclusion about the real purpose of his "bi-partisanship".  That purpose being to make enacting substantive reform dependent on Republican cooperation so that said reform will fail.  

    I'm convinced Obama's promises of "change we can believe in" were always a lie.  He has used the tactics and rhetoric of bi-partisanship to give himself and excuse for his failure to keep his promises, and to provide political cover; shifting the blame for his deliberate failures on to the Republicans.

    I now understand Obama to be a defender of the Status Quo who managed to at least temporarily deflect the masses' call for substantive change.  Understood from the perspective of defending the status quo, Obama's bi-partisanship has been a brilliant success.

    When you vote, you are exercising political authority, you're using force. And force my friends is violence. The supreme authority...

    by Thought Crime on Wed Sep 01, 2010 at 08:08:29 AM PDT

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