President Obama's Biggest Mistake: Underestimating Bush Great Recession Severity

[Lakhota]

By DAVID LEONHARDT

WORKING out of cramped, bare offices in a downtown building here in Washington, President-elect Obama’s economic team spent the final weeks of 2008 trying to assess how bad the economy was. It was during those weeks, according to several members of the team, when they first discussed academic research by the economists Carmen M. Reinhart and Kenneth S. Rogoff that would soon become well known.

Ms. Reinhart and Mr. Rogoff were about to publish a book based on earlier academic papers, arguing that financial crises led to slumps that were longer and deeper than other recessions. Almost inevitably, the economists wrote, policy makers battling a crisis made the mistake of thinking that their crisis would not be as bad as previous ones. The wry title of the book is “This Time Is Different.”

In my interviews with Obama advisers during that time, they emphasized that they knew the history and were determined to avoid repeating it. Yet of course they did repeat it. After successfully preventing another depression, in 2009, they have spent much of the last three years underestimating the economy’s weakness. That weakness, in turn, has become Mr. Obama’s biggest vulnerability, helping cost Democrats control of the House in 2010 and endangering his accomplishments elsewhere.

By any measure, Mr. Obama and his team faced a tremendously difficult task. They inherited the worst economy in 70 years, as well as an opposition party that was dedicated to limiting the administration to one term and that fought attempts at additional action in 2010 and 2011. And the administration can rightly claim to have performed better than many other governments around the world.

But their claim on having done as well as could reasonably have been expected — to have avoided major mistakes — is hard to accept. They considered the possibility of a long, slow recovery and rejected it.

In the early months of the crisis, Mr. Obama and his aides made clear that they would try to learn from the errors of the Great Depression and do better. They achieved that goal. They also left a whole lot of lessons for the people who will have to battle the next financial crisis.

Much More: Obamanomics: A Counterhistory - The New York Times

 

[Erand7899]

By DAVID LEONHARDT

WORKING out of cramped, bare offices in a downtown building here in Washington, President-elect Obama’s economic team spent the final weeks of 2008 trying to assess how bad the economy was. It was during those weeks, according to several members of the team, when they first discussed academic research by the economists Carmen M. Reinhart and Kenneth S. Rogoff that would soon become well known.

Ms. Reinhart and Mr. Rogoff were about to publish a book based on earlier academic papers, arguing that financial crises led to slumps that were longer and deeper than other recessions. Almost inevitably, the economists wrote, policy makers battling a crisis made the mistake of thinking that their crisis would not be as bad as previous ones. The wry title of the book is “This Time Is Different.”

In my interviews with Obama advisers during that time, they emphasized that they knew the history and were determined to avoid repeating it. Yet of course they did repeat it. After successfully preventing another depression, in 2009, they have spent much of the last three years underestimating the economy’s weakness. That weakness, in turn, has become Mr. Obama’s biggest vulnerability, helping cost Democrats control of the House in 2010 and endangering his accomplishments elsewhere.

By any measure, Mr. Obama and his team faced a tremendously difficult task. They inherited the worst economy in 70 years, as well as an opposition party that was dedicated to limiting the administration to one term and that fought attempts at additional action in 2010 and 2011. And the administration can rightly claim to have performed better than many other governments around the world.

But their claim on having done as well as could reasonably have been expected — to have avoided major mistakes — is hard to accept. They considered the possibility of a long, slow recovery and rejected it.

In the early months of the crisis, Mr. Obama and his aides made clear that they would try to learn from the errors of the Great Depression and do better. They achieved that goal. They also left a whole lot of lessons for the people who will have to battle the next financial crisis.

Much More: Obamanomics: A Counterhistory - The New York Times

Mr. Obama and his aides didn't know a damn thing more about economics than President Obama and his aides did. They tried to duplicate FDRs policies during the Great Depression, and got the same lousy results. Who would have guessed that would happen.

You might ask yourself why a UAW mechanic in Ohio is a more valuable citizen than a non union mechanic in Florida, or a plumber in Kansas. Why does one deserve a massive government expenditure to save his job, and the others do not? Is that in keeping with the "every American is equal under the law" tenet that is the heart of Americanism?

Obama used Hundreds of billions of our dollars to shore up his base. His cronies got some, campaign contributors got some, and unions got some. The rest of America got shafted.

Now, the useful idiot brigade is attempting to explain away his failures. What a bunch of dorks.

 

[Saigon]

I totally agree with the OP.

In retrospect, I think what Obama should have done on Day One was address the nation and explain that the country was virtually bankrupt.

I'd like to have seen some austerity measures introduced, with perhaps cuts to the military being introduced very quickly.

Much of the Stimulus was necessary, but parts of it were not, and could have been cut.

 

[Lovebears65]

He said he could fix it, he did not, Instead he mad it worst. Hey he tried it is time to say goodbye. Not give him 4 more years to fuck it up even more!!

By DAVID LEONHARDT

WORKING out of cramped, bare offices in a downtown building here in Washington, President-elect Obama’s economic team spent the final weeks of 2008 trying to assess how bad the economy was. It was during those weeks, according to several members of the team, when they first discussed academic research by the economists Carmen M. Reinhart and Kenneth S. Rogoff that would soon become well known.

Ms. Reinhart and Mr. Rogoff were about to publish a book based on earlier academic papers, arguing that financial crises led to slumps that were longer and deeper than other recessions. Almost inevitably, the economists wrote, policy makers battling a crisis made the mistake of thinking that their crisis would not be as bad as previous ones. The wry title of the book is “This Time Is Different.”

In my interviews with Obama advisers during that time, they emphasized that they knew the history and were determined to avoid repeating it. Yet of course they did repeat it. After successfully preventing another depression, in 2009, they have spent much of the last three years underestimating the economy’s weakness. That weakness, in turn, has become Mr. Obama’s biggest vulnerability, helping cost Democrats control of the House in 2010 and endangering his accomplishments elsewhere.

By any measure, Mr. Obama and his team faced a tremendously difficult task. They inherited the worst economy in 70 years, as well as an opposition party that was dedicated to limiting the administration to one term and that fought attempts at additional action in 2010 and 2011. And the administration can rightly claim to have performed better than many other governments around the world.

But their claim on having done as well as could reasonably have been expected — to have avoided major mistakes — is hard to accept. They considered the possibility of a long, slow recovery and rejected it.

In the early months of the crisis, Mr. Obama and his aides made clear that they would try to learn from the errors of the Great Depression and do better. They achieved that goal. They also left a whole lot of lessons for the people who will have to battle the next financial crisis.

Much More: Obamanomics: A Counterhistory - The New York Times

 

[Erand7899]

I totally agree with the OP.

In retrospect, I think what Obama should have done on Day One was address the nation and explain that the country was virtually bankrupt.

I'd like to have seen some austerity measures introduced, with perhaps cuts to the military being introduced very quickly.

Much of the Stimulus was necessary, but parts of it were not, and could have been cut.

Apparently, the fact that the country was not virtually bankrupt, didn't enter your logic process. The financial meltdown had been averted before Obama ever took office, and the recession ended in June, before any of his stimulus ever entered the equation.

It is rarely a good idea to cut the military when they are engaged in two fronts of the war on terrorism.

What he should have done, was announce to the American people that the Bush tax cuts would remain until the economy was fully recovered, and that he would enforce a moratorium on regulations for the same period. Then after vetoing the Dodd/Frank bill, he could have sat back and watched the economy come bouncing back.

But, he didn't. Like most liberals, he is close to ignorant on macro-economics, and has the unfounded idea that government can solve economic problems in a market economy.

 

[bigrebnc1775]

code for we can no longer blame bush

 

[bigrebnc1775]

By DAVID LEONHARDT

WORKING out of cramped, bare offices in a downtown building here in Washington, President-elect Obama’s economic team spent the final weeks of 2008 trying to assess how bad the economy was. It was during those weeks, according to several members of the team, when they first discussed academic research by the economists Carmen M. Reinhart and Kenneth S. Rogoff that would soon become well known.

Ms. Reinhart and Mr. Rogoff were about to publish a book based on earlier academic papers, arguing that financial crises led to slumps that were longer and deeper than other recessions. Almost inevitably, the economists wrote, policy makers battling a crisis made the mistake of thinking that their crisis would not be as bad as previous ones. The wry title of the book is “This Time Is Different.”

In my interviews with Obama advisers during that time, they emphasized that they knew the history and were determined to avoid repeating it. Yet of course they did repeat it. After successfully preventing another depression, in 2009, they have spent much of the last three years underestimating the economy’s weakness. That weakness, in turn, has become Mr. Obama’s biggest vulnerability, helping cost Democrats control of the House in 2010 and endangering his accomplishments elsewhere.

By any measure, Mr. Obama and his team faced a tremendously difficult task. They inherited the worst economy in 70 years, as well as an opposition party that was dedicated to limiting the administration to one term and that fought attempts at additional action in 2010 and 2011. And the administration can rightly claim to have performed better than many other governments around the world.

But their claim on having done as well as could reasonably have been expected — to have avoided major mistakes — is hard to accept. They considered the possibility of a long, slow recovery and rejected it.

In the early months of the crisis, Mr. Obama and his aides made clear that they would try to learn from the errors of the Great Depression and do better. They achieved that goal. They also left a whole lot of lessons for the people who will have to battle the next financial crisis.

Much More: Obamanomics: A Counterhistory - The New York Times

Who controlled congress the last two years of Bush and the first two years of obama?
Correct me if I am wrong but wasn't obama a senator while bush was president?

 

[francoHFW]

Dems controlled congress for 6 months, 7/7/2009-2/4/2010. Otherwise the Pubs had veto or filibuster control.

 

[Rozman]

By DAVID LEONHARDT

WORKING out of cramped, bare offices in a downtown building here in Washington, President-elect Obama’s economic team spent the final weeks of 2008 trying to assess how bad the economy was. It was during those weeks, according to several members of the team, when they first discussed academic research by the economists Carmen M. Reinhart and Kenneth S. Rogoff that would soon become well known.

Ms. Reinhart and Mr. Rogoff were about to publish a book based on earlier academic papers, arguing that financial crises led to slumps that were longer and deeper than other recessions. Almost inevitably, the economists wrote, policy makers battling a crisis made the mistake of thinking that their crisis would not be as bad as previous ones. The wry title of the book is “This Time Is Different.”

In my interviews with Obama advisers during that time, they emphasized that they knew the history and were determined to avoid repeating it. Yet of course they did repeat it. After successfully preventing another depression, in 2009, they have spent much of the last three years underestimating the economy’s weakness. That weakness, in turn, has become Mr. Obama’s biggest vulnerability, helping cost Democrats control of the House in 2010 and endangering his accomplishments elsewhere.

By any measure, Mr. Obama and his team faced a tremendously difficult task. They inherited the worst economy in 70 years, as well as an opposition party that was dedicated to limiting the administration to one term and that fought attempts at additional action in 2010 and 2011. And the administration can rightly claim to have performed better than many other governments around the world.

But their claim on having done as well as could reasonably have been expected — to have avoided major mistakes — is hard to accept. They considered the possibility of a long, slow recovery and rejected it.

In the early months of the crisis, Mr. Obama and his aides made clear that they would try to learn from the errors of the Great Depression and do better. They achieved that goal. They also left a whole lot of lessons for the people who will have to battle the next financial crisis.

Much More: Obamanomics: A Counterhistory - The New York Times

So Obama screwed up and screwed up badly.....

 

[francoHFW]

Not. Mindless Pub obstruction for 3 years. Assume the position.

 

[bigrebnc1775]

Dems controlled congress for 6 months, 7/7/2009-2/4/2010. Otherwise the Pubs had veto or filibuster control.

Are you that fucking stupid? why am I asking of course you are
democrats controlled congress the last two years of Bush and they controlled congress the first two years of obama.

 

[francoHFW]

Sure. LOL

 

[editec]

I guess we'll never know what Obama might have done if he'd had a CONGRESS willing to work to really address the issues facing this economy.

Frankly, short of doing some truly drastic rethink of the way this economy works, and implementing a new plan that actually addresses the problems that caused this mess, it was a foregone conclusion that our recovery was going to be feeble.

What's more very little has changed to prevent still another disaster.

The working classes of this nation have been rode hard and put away wet, folks.

Until that single issue of the declining puchasing power if the working classes are addressed the economy MOST AMERICANS live in is going to be a crap-fest.

Neither Obama nor Mitt has a plan and lord knows Congress isn't going to fix things.

The masters LIKE this economy just fine, thank you very much.

 

[Rozman]

I guess we'll never know what Obama might have done if he'd had a CONGRESS willing to work to really address the issues facing this economy.

Frankly, short of doing some truly drastic rethink of the way this economy works, and implementing a new plan that actually addresses the problems that caused this mess, it was a foregone conclusion that our recovery was going to be feeble.

What's more very little has changed to prevent still another disaster.

The working classes of this nation have been rode hard and put away wet, folks.

Until that single issue of the declining puchasing power if the working classes are addressed the economy MOST AMERICANS live in is going to be a crap-fest.

Neither Obama nor Mitt has a plan and lord knows Congress isn't going to fix things.

The masters LIKE this economy just fine, thank you very much.

The bigger problem is this.
Let's say more money gets into the hands of the working class.
What then.
The products they buy are pretty much all made in China.
All it means is that more money will find it's way leaving the country.

Get more jobs here,get manufacturing back here...
This fixes a bunch of things.

 

[Stephanie]

Is there any excuse they won't make for this man?

Why should we re-elect someone who was too stupid to see how bad things were?

what a joke

 

[Saigon]

Is there any excuse they won't make for this man?

Why should we re-elect someone who was too stupid to see how bad things were?

what a joke

You must feel terrible about the Republicans blocking Bush's TARP plans, right?