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Krugman to Obama: I Told You So

Bush-style hedging on possible 2nd stimulus isn't helping anyone

By Jason Farago, Newser Staff

Posted Jul 10, 2009 10:23 AM CDT

(Newser) – 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."

[Images (3)]

[Quotes (1)]

Vice President Joe Biden speaks about the stimulus program in front of the former American Can Co. factory, Thursday, July 9, 2009, in Cincinnati. (AP Photo/Al Behrman)

President Barack Obama pauses before a meeting at the G8 Summit, Thursday, July 9, 2009, in L'Aquila, Italy. (AP Photo/Haraz N. Ghanbari)

President Obama's economic team: Tim Geithner, treasury secretary; Christina Romer, director of the Council of Economic Advisers; and Larry Summers, director of the National Economic Council. (AP Photo/Ron Edmonds)

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The president needs to admit that he may not have done enough on the first try. What he needs, in short, is to do for economic policy what he’s already done for race relations and foreign policy— talk to Americans like adults. - Paul Krugman

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COMMENTS

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Showing 3 of 12 comments

armywife

Jul 11, 2009 2:13 AM CDT

you know, democrats have an almost identical saying about republicans. why dont we all just admit that all politicians lie to some degree, it's an important part of the job actually. after all, who said that whole "read my lips...no new taxes"? bush sr., a republican. they all lie.

Snowleopard

Jul 10, 2009 10:02 AM CDT

godawgs - good observation about the timing, but I also think it's because 1) they were expecting the recovery to be long and slow and 2) because it takes a while to get some of the projects running.

Snowleopard

Jul 10, 2009 10:01 AM CDT

Mr. C: it's because most economists believe that the size of the stimulus wasn't large enough to counter the contracting economy. No, they won't get another stimulus passed, but unfortunately that means that the economy is about to get a lot worse.

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Krugman to Obama: I Told You So