Krugman On Obama: 'Bad Analysis, Bad Policy'
Scape @ Fri Mar 20, 2009 11:57 am
$1:
Preliminary thoughts on the tax bill:
1. It’s not the way you should make policy — it’s clumsy, and it will punish some innocent parties while letting the most guilty off scot-free
2. But — there wasn’t much alternative at this point. And for that I blame the Obama people.
I’ll leave to others the question of who knew or should have known that the bonus firestorm was coming; but it’s part of a pattern. At every stage, Geithner et al have made it clear that they still have faith in the people who created the financial crisis — that they believe that all we have is a liquidity crisis that can be undone with a bit of financial engineering, that “governments do a bad job of running banks” (as opposed, presumably, to the wonderful job the private bankers have done), that financial bailouts and guarantees should come with no strings attached.
This was bad analysis, bad policy, and terrible politics. This administration, elected on the promise of change, has already managed, in an astonishingly short time, to create the impression that it’s owned by the wheeler-dealers. And that leaves it with no ability to counter crude populism.
sandorski @ Fri Mar 20, 2009 12:14 pm
Ouch. This criticism likely hurts as he is a highly respected Economist, specifically amongst Democrats. He raises good points.
dog77_1999 @ Sat Mar 21, 2009 12:25 am
I am really confused about the communication between Obama and Geithner. Is there any? 3 weeks ago, Obama came out and said Geithner would have a plan laid out by the next day. Geithner then says it will be laid out in 2 weeks. 1 week late and still nothing.
These communication issues need to be ironed out. Obama has to communicate and be more active, especially if he want to implement his policies.
Thanos @ Sat Mar 21, 2009 2:03 am
Geithner's said to be technically very smart but politically very dumb. Hence how the issue with Dodd and the AIG bonuses needlessly blew up in his face. It's hard to judge after only two months in office but Geithner will probably end up being the first one sacrificed if for no other reason than to take him away as a potential lightning rod for the Repulsicans to exploit. Obama can't sit back, lose all his political capital, and endlessly take the blame for an economic and regulatory fiasco that essentially began when the GOP took Congress back in 1994.