Over all, the effect was to kick the can down the road. And that’s not good enough. So far the Obama administration’s response to the economic crisis is all too reminiscent of Japan in the 1990s: a fiscal expansion large enough to avert the worst, but not enough to kick-start recovery; support for the banking system, but a reluctance to force banks to face up to their losses. It’s early days yet, but we’re falling behind the curve.Time for President Obama to buy some new jumper cables?
And I don’t know about you, but I’ve got a sick feeling in the pit of my stomach — a feeling that America just isn’t rising to the greatest economic challenge in 70 years. The best may not lack all conviction, but they seem alarmingly willing to settle for half-measures. And the worst are, as ever, full of passionate intensity, oblivious to the grotesque failure of their doctrine in practice.
Friday, February 13, 2009
Trying to jump start the economy with rusty jumper cables that are too short
It was probably too much to expect that the new guy could sweep into office, hook up the jumper cables and the economy would crank right up and restart. The same deeply compromised political system, fragmented by special interests and ideology, that helped give us the mess in the first place have given us a flawed and compromised stimulus bill and a bank bailout that raised more skepticism than hope when it was announced. Paul Krugman summed it up today: