stick it to Larry Summers just once more for good luck.
The real story of this election, then, is that of an economic policy that failed to deliver. Why? Because it was greatly inadequate to the task... If you look back now at the economic forecast originally used to justify the Obama economic plan, what’s striking is that forecast’s optimism about the economy’s ability to heal itself... Even without their plan, Obama economists predicted, the unemployment rate would peak at 9 percent, then fall rapidly. Fiscal stimulus was needed only to mitigate the worst — as an “insurance package against catastrophic failure,” as Lawrence Summers, later the administration’s top economist, reportedly said in a memo to the president-elect... Could the administration have gotten a bigger stimulus through Congress? Even if it couldn’t, would it have been better off making the case for a bigger plan, rather than pretending that what it got was just right? We’ll never know.
This is not so, or at least not in the categorical way Krugman is presenting things. Summers argued often during the winter of 2009 that in matters of stimulus one never knew just how much was enough, but "the risk of doing too little is greater than doing too much." As for the Congress, Henry Waxman--one of the House's most progressive representatives, and no wimp--told NPR just last week that Rahm Emmanuel was right to propose what he did, that he had carefully counted the votes in the Senate and the package passed was the best the president could get.
What about the administration being "better off" just making the case for "bigger," even if smaller was the only bill possible? Actually, it did make that case, though in the middle of trying to come up with a plan to keep "toxic assets" from sinking the banks, keep people with crushing mortgages in their homes, save the auto industry, reform financial markets, reboot relations with the Arab world, and prepare a universal healthcare package, all the while trying to reassure investors who--unfairly, but what could then be done?--were the under 10% of Americans who controlled over 80% of the country's wealth.
Ah, but Krugman seems to be implying, the case for a bigger stimulus should have been made more strongly anyway; that there was at least some kind of public relations victory possible, a chance to control "the narrative," even if a tangible legislative victory was impossible against Republican leaders determined to both sabotage Obama's engine and then complain about its breakdown. (People I admire make more sophisticated versions of this case: John Judis says the administration might have struck a more "populist" chord, though "confidence" seemed more the watchword early in the precarious winter of 2009, and the inherent populism of the healthcare plan never really caught on as planned; Rick Hetzberg is certainly right to wonder about why we didn't get more of Obama's "outside game," especially when one saw the effect he could have on a crowd when he drove healthcare through.)
Still, if the issue is control of the narrative, not substantial achievement, has the administration really been the worst of the problem? Sure, it would have been better to see more of Ed Rendell and less of Larry Summers (or David Axelrod, for that matter) on the talk shows in the spring of 2009. But would it also not have been better for progressive columnists not to have appeared on the cover of Newsweek charging the Obama administration, which was actually blunted by Republican legislative veto, with selling its soul to Goldman Sachs? Where was the real catnip for 24/7 cable, shock radio, Fox, and even MSNBC? Oh, and who, now, thinks it would have been a good idea to have nationalized the banks? Who thinks the fight over the "public option" was really worth embarrassing Obama over, night after night for two months? Who thinks people who've defected from Obama have been more interested in the bigger stimulus as narrative than in whether it was really stupid for a cop to have arrested Skip Gates?
Look, Krugman is may be right to dislike Summers, his views, shows of arrogance, connections. (For my sins, I edited Summers at HBR in 1988, when he was working for Dukakis, and could have lived without the experience.) But even on the substance, good people might disagree. The persistence of unemployment, jobless recoveries, etc., in the new economy is a crisis for all progressive economists, not just Summers; and Krugman can be cavalier about these things himself. Keynes did not have to digest manufacturing robotics, smart networks, global sourcing, and financial instruments moving at light speed. Neither did Paul Samuelson or his rivalrous students. It is still not clear just what state action will produce the kinds of sustainable jobs and wages Krugman takes for granted when he speaks about, say, the Japanese government acting against the liquidity traps of the 1990s. Nor can one speak about deficits by calmly comparing America's rate of debt to GDP today to that of America after WWII, when the US was the science and manufacturing powerhouse of the world, and the world needed one of everything.
This week of all weeks, Krugman might be defending Obama's quite consistent vision, showing some admiration for his narrative, the way Rick Hertzberg (who saw what happened to Jimmy Carter) regularly has; or be defending investments in green infrastructure, higher education, and scientific entrepreneurship the way that other Times columnist does; or defending Obama's most populist of plans, the one to reimpose higher taxes on the (very) rich, a plan Austan Goolsbee is spearheading--or is Goolsbee's connection University of Chicago economics department a problem, too?
Who knows what will really happen on Tuesday. But we know that it will be followed by another Tuesday in 2012, and I don't see the broadcast media getting any more Morrowish by then, or the flocking of "independents" any less steered by who seems hot and what seems cool. Telling people you admire a president actually matters. A big piece of the narrative held against Obama is that liberals "always think they're better than ya'." I suspect Obama is now thinking this piece may be sadly true, and that we'll get, yet again, only the president we deserve.