David Leonhardt at the NY Times argues that in reality,
none of Obama's legislative successes matter to voters because the country lost some 3 million jobs during his first year in office. The country may have gained some half a million jobs this year total, but that still leaves 7.5 million jobs to go to get back to 2007, and nothing else matters to voters.
So what happened?
Recoveries from financial crises tend to be long and slow. The European debt crisis, which began early this year and sent stocks around the world falling, seems to have taken away the American economy’s slim margin for error. By May, hiring by companies had slowed.
Stimulus spending was starting to slow, too. And White House political aides were looking at polls showing voters were worried about deficits and spending. Put it all together, and the aggressive policy response of 2008 and 2009 faded.
In December 2009, the House passed a second stimulus bill, totaling $154 billion. But it languished. By the time the Senate took it up in February, a special Senate election in Massachusetts had cost the Democrats their filibuster-proof majority. The bill that the Senate eventually passed, and that became law, was only one-tenth as large as the House version.
At the Fed, meanwhile, some officials were warning — incorrectly, it’s now clear — that the economy could be at risk of growing too quickly and setting off inflation. Yet Mr. Obama let two Fed seats sit vacant for months, rather than fill them with economists who could have lent more balance. Only recently has the Fed started trying to lift growth again.
White House officials respond to these criticisms by pointing out that they helped break the back of the worst financial crisis in 80 years and that Republicans opposed nearly every tax cut or spending increase Democrats proposed. That’s all true. But I keep coming back to the fact that this administration is full of people who knew that financial crises tended to produce weak recoveries — and that the typical policy mistake was being too timid.
“We’re just not going to make that mistake,” Timothy Geithner, the incoming Treasury secretary, told me, as Mr. Obama was preparing to take office. “We’re not going to do that. We’ll keep at it until it’s done, whatever it takes.”
Mr. Obama and his team may yet succeed at doing that. But for reasons both beyond and within their control, it will take longer than they hoped or expected. And longer than voters hoped or expected.
The stimulus package was too small. It didn't work, it was fated not to work, and Republicans seized upon it not working: that was the plan all along. It stopped our descent, but left us in deep in the hole. It was literally a worst of both worlds situation: a major deficit expense that in the eyes of many Americans failed. I said 18 months ago that it wasn't going to work, that it was not targeted correctly, and that it contained tax cuts that weren't stimulative enough.
A complete payroll tax holiday instead of a smaller payroll tax credit, more funding to states to preserve state employee jobs, more infrastructure projects to take advantage of the glut in construction workers left unemployed from the housing bubble, larger workfare programs, all of those could have made a real difference instead of being half-assed and would have put money back into the retail end of the economy, stimulated demand, and saved jobs. If that meant capital gains and estate tax cuts to get conservatives on board to pass it, then great.
Of course, it wasn't going to happen. As I predicted then, the plan was to give Obama just enough stimulus to hang himself with, and now the Republicans are poised to make big gains. When they lock up Congress for another two years and the economy falls off a cliff, they'll blame Obama too. A Pyhrric victory...but a victory nonetheless.
And that's all that matters, apparently. By not seeing the obvious trap then, the Dems face the mob now. And that failure indeed rests on the shoulders of one Barack Obama.
