Bold Is Better – Will Obama Step Up To The Plate?
Euphoria is turning into something more useful. Paul Krugman conjectured yesterday whether Obama had what it takes to turn this country around.
The political lesson is that economic missteps can quickly undermine an electoral mandate. Democrats won big last week — but they won even bigger in 1936, only to see their gains evaporate after the recession of 1937-38. Americans don’t expect instant economic results from the incoming administration, but they do expect results, and Democrats’ euphoria will be short-lived if they don’t deliver an economic recovery.
The economic lesson is the importance of doing enough. F.D.R. thought he was being prudent by reining in his spending plans; in reality, he was taking big risks with the economy and with his legacy. My advice to the Obama people is to figure out how much help they think the economy needs, then add 50 percent. It’s much better, in a depressed economy, to err on the side of too much stimulus than on the side of too little.
In short, Mr. Obama’s chances of leading a new New Deal depend largely on whether his short-run economic plans are sufficiently bold. Progressives can only hope that he has the necessary audacity.
The challenge Obama faces boils down to a single tussle. Does he succumb to the short-termism of the past and create a superficial economic recovery, or does he tackle the deeper infrastructure issues, like a healthcare system and a green industrial policy, to build a long lasting economic legacy.
There’s really no way of knowing whether Obama will take the greatest opportunity the nation has had to forge , or whether his more bipartisan side will rear its head and win the day. We can pick through the tea leaves right now, wait until we know more about his team, and then wait and see what the first 100 days tells us. We’re at a critical moment. We have to hope that Obama is more about change than he is about unity.
