Back in January I cited a Paul Krugman piece which I suggested we put in a time capsule and open in 24 months. Unfortunately, we don't have to wait that long, as six months is about enough time to have a look at what Krugman wrote:
I see the following scenario: a weak stimulus plan, perhaps even weaker than what we're talking about now, is crafted to win those extra GOP votes. The plan limits the rise in unemployment, but things are still pretty bad, with the rate peaking at something like 9 percent and coming down only slowly. And then Mitch McConnell says "See, government spending doesn't work."Welp, he got it all too right.Let's hope I've got this wrong.
Dedalus followed up a bit later with another Krugman quote:
The real question now is whether Obama will be able to come back for more once it's clear that the plan is way inadequate. My guess is no. This is really, really bad.I commented on that post:
The bill wasn't large enough to begin with, even at $900 billion. Now it's been scaled back, spending reduced and tax cuts increased. This is a reciped for disaster, and when it fails, Republicans will be pointing fingers at Obama.And now here we are.
Incredibly, the White House according to Joe Biden today doesn't think a second stimulus package is needed, at least not yet. They think that with unemployment spiking beyond early forecasts and with consumer optimism and spending going back down, it is premature for a second package. Why? Because all that great infrastructure spending from the first package hasn't kicked in yet.
Looking back to January when Obama took office, Biden said: "The truth is, we and everybody else misread the economy ... We misread just how bad the economy was."
No Mr. Veep, not everyone misread the economy, just the Republicans. There were many Democrats, many progressive Democrats who knew the economy was in the tank and who argued for more and better-targeted stimulus programs. Some of them were even Nobel laureates. So please don't bring that revisionist history crap around here.
"So the second question becomes, did the economic package we put in place, including the Recovery Act, is it the right package given the circumstances we're in? And we believe it is the right package," Biden told ABC's "This Week" in an interview taped during a trip to Iraq.
Those circumstances being that you, Larry Summers, and Tim Geithner blew billions in taxpayers funds into the bottom lines of AIG, Citibank, JP Morgan Chase, and especially Goldman Sachs, all in the stupid hope that it would kick-start lending and liquidity. Instead, you made some of the culprits very happy while small businesses saw their credit lines dry up. That money should have been directed at states and regional banks, and the mortgage problem instead of Wall Street.
Asked if another stimulus package was needed, Biden said, "I think it's premature to make that judgment."
If the White House really feels that the paltry amounts it included for roads, bridges, water projects, sewers, and the national energy grid are sufficient to pull the economy out of the slide in the coming months, then they're whistling past the graveyard for 2010. By the time they come around to what a growing number on the center-left already realizes, it will be too late to get a second package through without handing the GOP its centerpiece issue for the midterms.
I'm not sure what's worse with this crew: their miscalculations or political or economic strategy.
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Bush is still one sick bastard - he's planning on displaying Saddam's pistol in his new library.
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