Yesterday, while the stock market went into freefall, Paul Krugman called for "a little self-indulgent calm," and posted on his website this great acoustic version of the Arcade Fire song We Used To Wait.
Now it is time to get agitated again. In today's column, Krugman explains, as he has done repeatedly over many months, that "the economy isn’t recovering, and Washington has been worrying about the wrong things." Of course, the Republicans won't change their tired tune. They "won’t stop screaming about the deficit because they weren’t sincere in the first place: Their deficit hawkery was a club with which to beat their political opponents, nothing more — as became obvious whenever any rise in taxes on the rich was suggested. And they’re not going to give up that club."
But, it is important to note that "the policy disaster of the past two years wasn’t just the result of G.O.P. obstructionism, which wouldn’t have been so effective if the policy elite — including at least some senior figures in the Obama administration — hadn’t agreed that deficit reduction, not job creation, should be our main priority."
So how to turn this around? It requires more than President Obama again promising to "pivot" to jobs and then merely proposing symbolic measures. "The Fed needs to stop making excuses, while the president needs to come up with real job-creation proposals. And if Republicans block those proposals, he needs to make a Harry Truman-style campaign against the do-nothing G.O.P." Wouldn't that be music to our ears.
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I wish everyone read Krugman and Robert Reich daily, starting with the President. It certainly would be music to my ears if he would finally follow Krugman's advice: "The Fed needs to stop making excuses, while the president needs to come up with real job-creation proposals. And if Republicans block those proposals, he needs to make a Harry Truman-style campaign against the do-nothing G.O.P."
Given the new institutional constraints built into the debt deal (super-committee compromise or sequestration), however, I have to agree with Reich the other day: Obama can no longer make that pivot. It's a matter of "Who's on first?" "I Dunno."
Unless, that is, Obama is now ready to launch the kind of Trumanesque campaign Krugman suggests. I fear that if Obama were up to that, he could have - and should have - done so a week or two ago, together with unilateral action to avoid default.
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