Krugman Warns Of Power Vacuum In Economic Crisis

Paul Krugman warns in the New York Times that President Bush's lame duck tenure could do serious damage to an economy already in a downward spiral:

Everyone's talking about a new New Deal, for obvious reasons. In 2008, as in 1932, a long era of Republican political dominance came to an end in the face of an economic and financial crisis that, in voters' minds, both discredited the G.O.P.'s free-market ideology and undermined its claims of competence. And for those on the progressive side of the political spectrum, these are hopeful times.

There is, however, another and more disturbing parallel between 2008 and 1932 -- namely, the emergence of a power vacuum at the height of the crisis. The interregnum of 1932-1933, the long stretch between the election and the actual transfer of power, was disastrous for the U.S. economy, at least in part because the outgoing administration had no credibility, the incoming administration had no authority and the ideological chasm between the two sides was too great to allow concerted action. And the same thing is happening now.

It's true that the interregnum will be shorter this time: F.D.R. wasn't inaugurated until March; Barack Obama will move into the White House on Jan. 20. But crises move faster these days.

How much can go wrong in the two months before Mr. Obama takes the oath of office? The answer, unfortunately, is: a lot. Consider how much darker the economic picture has grown since the failure of Lehman Brothers, which took place just over two months ago. And the pace of deterioration seems to be accelerating.

...

[N]othing is happening on the policy front that is remotely commensurate with the scale of the economic crisis. And it's scary to think how much more can go wrong before Inauguration Day.

Joe Klein also makes the FDR comparison, and adds his own frustration:

The problem is that nothing of significance can or will happen until the new President takes office in January, even though there is--finally--a great appetite for action in Washington. This is going to be a very frustrating few months. All of a sudden we understand how our grandparents felt in the winter of 1932-3, waiting for Franklin Roosevelt--and why the inauguration was moved up from March 4 to January 20 thereafter.

Barack Obama's desire to keep a low profile while he fleshes out his Administration is understandable, but frustrating all the same. And George W. Bush's blatant diffidence is annoying, too--not that he has even the tiniest shred of credibility left, but it would be nice if he sort of tried to say or do something comforting in these bleak days. Stripped of bluster, he has become a cipher. So we're left with a void at the top at a moment of real national anxiety. History has resumed, but time seems to have frozen to a dead stop. 2009 can't come soon enough.

Comments

[chumley207]

The only significant thing Bush could do at this point is to turn the keys over to Obama a few months early. Bush is a dolt who has never had an answer for any problem that confronted him as President. A monkey in the Oval Office would have done less harm.

[K.J. Dwyer - Huffpost Blogger]

I live in Argentina and there's a Spanish expression that a lot of people are using to describe Bush.

Mono con navaja (monkey with a barber's razor). That pretty well describes him.

[mamacat]

Krugman speaks wisdom in the midst of a cacophony of nonsense. Even now, the George Wills, George Bushes, and Grahams are claiming that what happened is not a failure of neo-con economic philosophy, but is in fact due to not enough deregulation. God protect us from fools and idiots.

[PhilipTaylor]

This NYT article feeds into another NYT article on Huffington Post that calls for Bush and Cheney to step down to allow AMERICA to get on with its RECOVERY from the worst Financial Crisis in our LIFETIME and two expensive WARS!

We need to start NEW right after Thanksgiving!

[larry278]

Those such as the Messrs Krugman, Taylor & all others who call upon GW Bush & RB Cheney to resign from office could grow into a powerful pressure group which would force W & Cheney to leave office at once. The worlds' economic system was destroyed in the meltdown; the USA's economic/financial system was destroyed too. Bringing something resembling order out of chaos isn't the forte of W & his neo-con ideologues. W & his neo-con supporters, all 7 of them, are still obsessed with building W's legacy. W & the neo-cons have poured gasoline on the fire, are throwing matches & IED's, which explode as they hit the fire, to spread the fire. They are making W's legacy into a pyromaniac's mindless holocaust. If W wants to become America's Nero, he & Cheney won't resign. Nero wasn't remembered as a builder.
Pelosi could step in POTUS when W & Cheney resign. She would bring in the fire fighters to start controlling the blaze fuelled by W & the neo-cons orgy of deregulation. Obama would have a smaller blaze to battle. Rebuilding the worlds' economic structure could begin sooner.
How about it W & Cheney; ready to take a hit for team USA

[Jazzcomedian]

You can tell a lot about a potential president's term of office by their presidential heroes. McCain worships Teddy Roosevelt, and Obama worships Lincoln. Why wasn't W honest enough with us to admit that he worshiped Harding and Herbert Hoover? It's so obvious. Why not be upfront about it?

[jncc1701]

you give W too much credit, he does not know who Harding and Herbert Hoover are.

[mamacat]

"Isn't he the guy who invented the vacuum cleaner?"

[GoVeg]

I'm still high on Obama's win.

[leeman79]

He really looks like Alfred E. Newman.

[craneman]

Alfred might not like that !!

[rabiddog6708]

The less Shrub does in his remaining days, the better for the country. He fouls up everything he touches. He can only do more harm to the economy. He certainly isn't going to improve things....that is not in his nature.

[Rog49Thomas]

With President Pan isn't the real worry the competence vacuum?

Not that he won't do something but he do something really really bone headed?

[bronceye]

Gdub is very busy doing his neoconman thing. This recession, like his "war" provides him a smoke screen to run behind and do his thing. All of the disappearing money is flowing to his cronies.

[1201SLD]

It is very telling that George Bush is using his final gasping breaths laying minefields for the next administration.

[TovSquirrel]

There are--have always been?--a lot of vacuums in the DC area. Mainly to be found between the ears of our honorable elected representatives.

[offred]

We've already survived eight years of damage from the vacuum in Dubya's head. Please, please, let us survive the last 60 days of his tenure in the White House without a major catastrophe--is that too much to ask?

[larry278]

The fact that W can do & has done ir-repairable damage for his entire term makes the next 60 days a danger filled time. Look at the Paulson-Bernanke bail out. W & Co can turn a retreat into a rout; a surgical strike into a campaign of genocide. W will turn the recession into the mother of all depressions before 1/20/09. That boy is bad news.

[RadicalRepublican]

And it's scary to think how much more can go wrong before Inauguration Day.


I nominate scary for work of the year. Everybody's using it for everything.

[novowel4me]

Bush needs to step aside immediately for the good of the country.

[doctordoubt]

I go along with that. He needs to abdicate now,let Obama step in and do the job Bush obviously can't do.

[Haditup2here]

That would seem the case. However, after his low approval rating over the past two years, Bush is doing nothing other than feeding off of his own vengeance and spitefulness. He could have ushered the bailout to go towards re-negotiating of mortgages -- thereby reducing the amount of toxic investments. If he cared anything about retaining ones dignity he would have at least taken that approach. Did he do that? No, he did his Chicken Little rant so those in Wall Street can shore up capital and retain their little kitty of bonuses. For eight years, we've had to deal with Bush the Bully. Now, we are getting Bush the little coward who is stammering back and forth into the White House because for once there is a situation that he can't equate with Cops and Robbers.

[Agnim]

The wild bush is a DESTROYER!
He should be impeached to move him out of the way; because a lot can go wrong in two months; and bush would enjoy that too much.