A second economic stimulus package looks increasingly necessary, and President Obama may get "caught in a political-economic trap" if he doesn't act soon, warns Paul Krugman in the New York Times. The Fed is out of the picture, and the White House has to deal with legislators convinced that "government spending is bad, even in the face of the worst slump since the Great Depression." And Krugman can't help observing: "As I said, I was afraid this would happen."
Policy makers need both "patience and resolve," he writes. They should give their programs time, but they also need to be open to further action. Yet the White House is showing a dangerously Bush-like "infallibility complex" on the first stimulus, even forcing Joe Biden to retract his observation that the administration "misread" the economy. Another stimulus will be politically tough but economically crucial, and Obama has no choice but to "level with the American people."