Paul Krugman is trying to figure out what the Obama administration is doing on the economy. You can tell he wants to give Obama the benefit of the doubt, but he's having a hard time doing that. It appears to Krugman that Obama isn't going to move decisively on the financial crisis but is counting on general economic recovery getting the banks through.
Krugman also doesn't think the stimulus package is big enough. So he fears that the administration will fall far enough behind the curve that they'll never catch up, and will then become vulnerable to negative political fallout.
So here’s the picture that scares me: It’s September 2009, the unemployment rate has passed 9 percent, and despite the early round of stimulus spending it’s still headed up. Mr. Obama finally concedes that a bigger stimulus is needed.
But he can’t get his new plan through Congress because approval for his economic policies has plummeted, partly because his policies are seen to have failed, partly because job-creation policies are conflated in the public mind with deeply unpopular bank bailouts. And as a result, the recession rages on, unchecked.
It seems that what Krugman is proposing, without saying it, is what SNL calls "The Rock Obama", a new more decisive, less-agreeable Obama. I would agree, but can Obama make that transformation? I have my doubts. It's just not who he is.