Krugman: 'Obama's Victory Feels Like Defeat'

03/16/2009 05:12 am ET | Updated May 25, 2011

In the New York Times, Paul Krugman wonders why President Obama's stimulus win doesn't feel like one:

By any normal political standards, this week's Congressional agreement on an economic stimulus package was a great victory for President Obama. He got more or less what he asked for: almost $800 billion to rescue the economy, with most of the money allocated to spending rather than tax cuts. Break out the Champagne!

Or maybe not. These aren't normal times, so normal political standards don't apply: Mr. Obama's victory feels more than a bit like defeat. The stimulus bill looks helpful but inadequate, especially when combined with a disappointing plan for rescuing the banks. And the politics of the stimulus fight have made nonsense of Mr. Obama's postpartisan dreams.

Republicans are still committed to "deep voodoo" economics, he writes. (Indeed, later on Thursday, the stimulus once again passed the House of Representatives with no Republican support.) And the "ugliness of the political debate," Krugman adds, suggests Obama would have trouble passing more stimulus legislation if this package falls short. Like many economists, Krugman believes the stimulus is too small -- cut down for political rather than practical reasons. He's also disappointed by Treasury Secretary Timothy Geithner's financial rescue.

"Over all," Krugman concludes, "the effect was to kick the can down the road. And that's not good enough."

At the American Prospect, Ezra Klein seconds Krugman's misgivings:

A large Democratic congressional majority brought to office over two successive elections in which voters repudiated the right. A new and popular Democratic president. And yet it still doesn't seem enough. The incentives of partisanship seem to easily outpace the urgency of crisis. But if this isn't enough, than what is? If our system can't respond to threat with cool planning during good times or quick responses during crises, then what can it do?

But Time's Justin Fox argues for a little patience.

First of all, Obama has been in office for all of three weeks. In that time he has gotten a stimulus package of a size that would have been pretty much unimaginable (except maybe to Krugman) a couple of months ago almost all the way through the legislative process, filled his cabinet and top advisory ranks at dizzying speed but made a few missteps along the way, and has yet to unveil a definitive plan for fixing a banking system embroiled in a once-in-a-century crisis.

Read Krugman's whole column here.

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