Wednesday, February 3, 2010

Krugman's "I Told You So" Moment

He's been saying it all along.  TAP:

That's the policy the administration has followed, more or less, since it launched a massive fiscal stimulus in February 2009, a program that has unequivocally benefited the economy. Indeed, the budget proposed this week includes some $300 billion in spending designed to reinforce the labor market -- and even then, White House economists expect the unemployment rate at the end of next year to be approximately 9.8 percent, virtually unchanged from the current rate of 10 percent. By the end of 2012, they expect it to drop to 7.9 percent, still higher than when the president was elected.

This has raised an obvious question among observers: Why isn't more being done to attack the problem of jobless recovery, especially with midterm elections right around the corner?

There are a couple of reasons why. In Congress, even Democrats have become leery of further spending and worry more about the attacks of Republicans than the results of their policies, despite recent polls suggesting Americans see job growth as a greater priority than cutting the deficit. And even if Congress is serious about creating the conditions for job growth, it's not clear that those policies would take effect by next fall, thanks to the slow-moving policy process. Bet Democrats are wishing they approved a bigger stimulus now.
This isn't just a chance for progressives to gloat, though, it's an opportunity for this administration to start making policy as bold as it really needs to be, realizing you're going to own it either way.  The attacks from the GOP are predictable and lack any resounding merit (if they did, the polls would look different than they do already... it's not like the TEA partiers haven't been at this almost a year now).  Do what needs doin'.  And find a far off closet to stick Evan Bayh in until 2013.

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