Friday, November 5, 2010

Today's Must Read: Paul Krugman

Paul Krugman's column today takes on Evan Bayh and others who claim Obama erred in failing to focus on the economy and who urge the Democrats to move to the Center.  According to Krugman, the problem isn't that Obama lacked focus but that he "settled for an economic plan that was far too weak," then pretended that everything was on track, and ended up adopting "the rhetoric of his enemies" that spending needed to be reined in.  Krugman previously contended that given how dire the economy was when Obama took office far stronger measures were required but his advisers were too optimistic in "the economy's ability to heal itself."  Krugman says that what Obama should have done was to boldly try to pass "a truly adequate economic plan," i.e., a bigger stimulus, and "place blame for the economy’s troubles on Republicans if they succeeded in blocking such a plan."  (Indeed, Krugman argued for a larger stimulus at the time the $800 billion plan was passed).  In a recent post on his blog, Krugman explained that given the inadequacy of the stimulus, "Obama could have tried to warn Americans of a long hard road ahead, and placed blame on Republicans; instead, the WH kept pretending that things were going swimmingly, never once acknowledging that the original plan wasn’t sufficient."  Krugman recalled that in Obama's first State of the Union address he adopted the Republican argument that the government needed to tighten its belt just like families across the country.  As Krugman has frequently noted, this not only bad politics but bad economics.  For example, in last week's column, Krugman explained that "governments should be spending while the private sector won’t" and "governments should be promoting widespread debt relief."  Krugman maintains that Obama needs to "take a stand."  He needs to "engineer significant relief to homeowners" and "propose real measures to create jobs and aid the unemployed and put Republicans on the spot for standing in the way of the help Americans need."  Krugman concludes that "Mr. Obama’s economic policy ended up being a political disaster precisely because he tried to play it safe. It’s time for him to try something different."


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