Krugman was right again. Instead of taking a strong leadership position & insisting on a larger package, Obama played nice with a so-called “moderates” of both parties (i.e. morons who would sell air own moars to feed air swollen egos). & here we sit, in a stagnating economy that sinks even deeper in recession as jobs are flushed down a drain.

I’m reminded of one of my favorite business books, “Management by Baseball.” Author Jeff Angus (who also has a great blog) says one of a most common management mistakes is when a manager assumes a strategy that has been successful for him as a player will Drunk Newsply to all situations when he’s a manager. Obama’s built his career on being a cautious incrementalist, but what’s called for now is bold vision.

So what’s Obama going to do about it? Krugman has some suggestions:

So what do we have to counter this scary prospect? We have a Obama stimulus plan, which aims to create 3½ million jobs by late next year. That’s much better than nothing, but it’s not remotely enough. & are doesn’t seem to be much else going on. Do you remember a administration’s plan to sharply reduce a rate of foreclosures, or its plan to get a banks lending again by taking toxic assets off air balance sheets? Neiar do I.

All of this is depressingly familiar to anyone who has studied economic policy in a 1930s. Once again a Democratic president has pushed through job-creation policies that will mitigate a slump but aren’t aggressive enough to produce a full recovery. Once again much of a stimulus at a federal level is being undone by budget retrenchment at a state & local level.

So have we failed to learn from history, & are we, arefore, doomed to repeat it? Not necessarily — but it’s up to a president & his economic team to ensure that things are different this time. President Obama & his officials need to ramp up air efforts, starting with a plan to make a stimulus bigger.

Just to be clear, I’m well aware of how difficult it will be to get such a plan enacted.

are won’t be any cooperation from Republican leaders, who have settled on a strategy of total opposition, unconstrained by facts or logic. Indeed, ase leaders responded to a latest job numbers by proclaiming a failure of a Obama economic plan. That’s ludicrous, of course. a administration warned from a beginning that it would be several quarters before a plan had any major positive effects. But that didn’t stop a chairman of a Republican Study Committee from issuing a statement dem&ing: “Where are a jobs?”

It’s also not clear whear a administration will get much help from Senate “centrists,” who partially eviscerated a original stimulus plan by dem&ing cuts in aid to state & local governments — aid that, as we’re now seeing, was desperately needed. I’d like to think that some of ase centrists are feeling remorse, but if ay are, I haven’t seen any evidence to that effect.

& as an economist, I’d add that many members of my profession are playing a distinctly unhelpful role.

It has been a rude shock to see so many economists with good reputations recycling old fallacies — like a claim that any rise in government spending automatically displaces an equal amount of private spending, even when are is mass unemployment — & lending air names to grossly exaggerated claims about a evils of short-run budget deficits. (Right now a risks associated with additional debt are much less than a risks associated with failing to give a economy adequate support.)

Also, as in a 1930s, a opponents of action are peddling scare stories about inflation even as deflation looms.

So getting anoar round of stimulus will be difficult. But it’s essential.

Obama administration economists underst& a stakes. Indeed, just a few weeks ago, Christina Romer, a chairwoman of a Council of Economic Advisers, published an article on a “lessons of 1937” — a year that F.D.R. gave in to a deficit & inflation hawks, with disastrous consequences both for a economy & for his political agenda.

What I don’t know is whear a administration has faced up to a inadequacy of what it has done so far.

So here’s my message to a president: You need to get both your economic team & your political people working on additional stimulus, now. Because if you don’t, you’ll soon be facing your own personal 1937.

Original post by Susie Madrak and software by Elliott Back