Like anyone who pays attention to business and financial news, I am in a state of high economic anxiety. Like everyone of good will, I hoped that President Obama’s Inaugural Address would offer some reassurance, that it would suggest that the new administration has this thing covered. But it was not to be. I ended Tuesday less confident about the direction of economic policy than I was in the morning…
Thus, in his speech Mr. Obama attributed the economic crisis in part to “our collective failure to make hard choices and prepare the nation for a new age” — but I have no idea what he meant. This is, first and foremost, a crisis brought on by a runaway financial industry. And if we failed to rein in that industry, it wasn’t because Americans “collectively” refused to make hard choices; the American public had no idea what was going on, and the people who did know what was going on mostly thought deregulation was a great idea…The members of Mr. Obama’s economic team certainly understand the extraordinary nature of the mess we’re in. So the tone of Tuesday’s address may signify nothing about the Obama administration’s future policy.
On the other hand, Mr. Obama is, as his predecessor put it, the decider. And he’s going to have to make some big decisions very soon. In particular, he’s going to have to decide how bold to be in his moves to sustain the financial system, where the outlook has deteriorated so drastically that a surprising number of economists, not all of them especially liberal, now argue that resolving the crisis will require the temporary nationalization of some major banks.
So is Mr. Obama ready for that? Or were the platitudes in his Inaugural Address a sign that he’ll wait for the conventional wisdom to catch up with events? If so, his administration will find itself dangerously behind the curve. And that’s not a place that we want the new team to be. The economic crisis grows worse, and harder to resolve, with each passing week. If we don’t get drastic action soon, we may find ourselves stuck in the muddle for a very long time.
Many people criticized Obama’s speech because it was too somber. Apparently they wanted more of an "upper." To me, Krugman has lost sight of the fact that 47% of Americans voted for a man who said that the American Economic "Fundamentals" were sound, and had a Grand Ole Opry character as his running mate. Obama’s speech prepared us for what was up ahead, and what he said was true. But his speech primarily focused on where we’ve been recently. "Thus, in his speech Mr. Obama attributed the economic crisis in part to ‘our collective failure to make hard choices and prepare the nation for a new age‘ — but I have no idea what he meant." What he meant was that we elected and re-elected George W. Bush; and that we went along with an aristocracy of the rich; and that we stopped being the "makers of things." What he meant is that we went along with lower taxes and escalating national debt and silly war-mongering. What he means is that instead of storming Washington and sending Bush to Texas tarred and feathered, we kept him around. What Obama meant is that we elected and re-elected corrupt Senators and Representatives. What he meant was that the people in my state gave him a lightweight like Saxby Chambliss instead of a 60 vote majority in the Senate. What he meant was that we bought houses we couldn’t afford and stopped paying for them in mid-stream. We collectively fucked up is what Obama meant – and we did.
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