Is Obama Too Cautious?

Martin Wolf at the Financial Times paints an alternative history in which Roosevelt takes office in 1930, before the Depression had begun in earnest and so lacking the mandate to tackle it aggressively. FDR takes the blame as he helplessly watches output and employment collapse. This, Wolf argues, is an analogy of what has happened to President Obama. Citing an article he wrote back in February 2009, Wolf says, “Instead of an overwhelming fiscal stimulus, what is emerging is too small, too wasteful and too ill-focused.” Even so, he points out that some bafflingly criticize the president for doing as much as he did, despite studies showing that even the too-small stimulus helped. For instance, Alan Blinder, former vice-chairman of the Fed, and Mark Zandi of Moody’s show that had there been no financial and fiscal intervention, GDP would have declined 12 percent instead of 4 percent, and unemployment would have peaked at a devastating 16.5 percent rather than 10 percent. The future is bleak: Employment will continue to suffer, and Republicans will push through new tax cuts, once again ignoring fiscal deficits, forcing Obama to choose between vetoing their tax cuts and supporting a “yacht-and-mansion” led recovery.