Robert Kuttner at Huffington Post:
[L]iberals are dismayed with Obama not because this or that initiative was insufficiently lefty. They are mad at Obama for blowing what had to be a Roosevelt moment, and thereby ushering in a totally needless period of far-right resurgence, dominated by a lunatic right that makes Newt Gingrich and Karl Rove look like moderates.
Obama did not decide to be bold in his first two years in office. He decided to be timid and conciliatory. People on his own economics team, such as Christina Romer, were telling him that the stimulus was far too small, and that it was too tilted to tax cuts.
Even more important than the scale of the recovery program was Obama's failure to be bold enough when it came to reorganizing failing banks. But his economic team, led by Larry Summers and Tim Geithner, opted for propping them up and disguising the big holes in their balance sheets rather than cleaning the banks out.
This approach, about as bold as Hank Paulson, had huge political and economic costs. Politically, it fed right wing populism by putting Obama in bed with Wall Street. Economically, it led to the Japan scenario that we are now suffering, in which even zero interest rates can't pull the economy out of the ditch.
And this is not Monday morning quarterbacking either. Several of America's best economists--Joseph Stiglitz, Paul Krugman, Simon Johnson, Nouriel Roubini--were making these criticisms at the time. So was the Congressional Oversight Panel ably led by Elizabeth Warren, which explains why Tim Geithner keeps trying to do her in.
The downside is that Obama and his orthodox economic team have ceded a moment of populist rage to a right wing that is not interested in governing or in problem solving, but only in tearing institutions down.
Obama will save his presidency and the economy by belatedly deciding to practice the boldness mistakenly ascribed to him--by putting forth a genuine recovery program, fighting for it, and exposing Republican obstructionism.
