There has been a lot of discussion lately about the economy—more than in the past few weeks. It seems as though we have reached some sort of economic tipping point, where things have gotten better, but won’t fully turn around or will get much worse unless the Obama administration takes some further serious steps to correct things. Rising unemployment, gains in foreclosures, as well as a constant lack in lending (which in my opinion will always be a practice that sees problems). A recent NYTimes article explained it well:
It is true that more time is needed to show results for policies that are currently in place, including stimulus spending, foreclosure relief and the bank rescue. But it is also clear that joblessness and defaults are worse now than was assumed when those policies were formed. So the need for more federal help is all but inevitable, as are political fights over renewed aid. President Obama may want to avoid those battles until health reform passes, but he still should lay the groundwork in three main areas.
If Obama doesn’t step it up, things will indeed go further south than before. Paul Krugman, the Nobel-winning economist, explained the stimulus trap so well that I encourage anyone to read it. He also had some pretty sound advice:
What Mr. Obama needs to do is level with the American people. He needs to admit that he may not have done enough on the first try. He needs to remind the country that he’s trying to steer the country through a severe economic storm, and that some course adjustments — including, quite possibly, another round of stimulus — may be necessary.
Obama seems to have totally moved on from this subject, and he did until it came up again in June after the job loss reports came in. It was a serious wake up call to the administration—one that Joe Biden jumped on too quickly. But whether the administration misread the economy or simply didn’t do enough, is a moot point. In concurrence with Paul Krugman, Bill Maher, and many other voices, I hope Obama has the guts to do what needs to be done, because he has not done enough.
I have recently received some criticism that the majority of stories are too one sided on this site. This post was somewhat in response to the comments. It will not be the last of its kind.
