Krugman and Wells

Where Do We Go from Here?

Paul Krugman and Robin Wells, The New York Review of Books

January 13, 2011

Despite what optimists within the White House may believe, the odds are not good for a repeat of 1996, when Bill Clinton made a startling political comeback after suffering a drubbing in the previous midterm elections. Clinton, after all, presided over a booming economy: in the two years prior to the 1996 election, the US economy added more than 5 million jobs, and by November 1996 the unemployment rate was only 5.4 percent. In contrast, Obama presides over an economy that has suffered a severe financial crisis-and recovery from a severe financial crisis is almost always slow and painful, with very high unemployment persisting for years. Professional forecasters surveyed by the Philadelphia Federal Reserve now predict an average unemployment rate of 8.7 percent in 2012, awful news for a president seeking reelection.

A tough, skillful political team might be able to win even in the face of such economic weakness. But the Obama team has demonstrated neither toughness nor skill. The trouble was apparent right from the beginning. After the 2008 election, Obama had the political winds at his back. Yet rather than bargaining from a position of strength and demanding an economic program adequate to the scale of the economy’s problems, Obama made his goal the working out of a cooperative political process-accommodation and the fantasy of bipartisanship.

And despite warnings from many economists (ourselves included) that the stimulus package that resulted was much too small, Obama engaged in premature triumphalism. In February 2009, he said of the plan:

It is the right size, it is the right scope. Broadly speaking it has the right priorities to create jobs that will jump-start our economy and transform it for the twenty-first century.

The only thing missing was a “Mission Accomplished” banner.

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(Democrats can not count) on Obama himself to lead a comeback. In a dispiriting 60 Minutes interview given after the midterms, he actually seemed to accept Republican smears-blaming himself, not the GOP, for the failure to “maintain the kind of tone that says we can disagree without being disagreeable.” And it’s truly astonishing that as corporate profits hit new records despite mass unemployment, Obama apparently takes seriously accusations that his administration is antibusiness.

Even if Obama were suddenly to find an inner FDR, would anyone notice? His aloofness has become so indelibly registered in voters’ minds that if he tried to change style-even if he wanted to, a big “if”-this would immediately come across as opportunistic. Having trusted and been disappointed by Obama once before, they are very unlikely to give him another chance.

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And this brings us to our last point. Democrats need to make it clear that if Obama isn’t going to be the leader of the Democratic agenda-and all indications are that he can’t or won’t-they will advance that agenda anyway, with or without his help. They have to be ready to delink their political fate from Obama, and make it clear that they won’t tolerate further undermining of their goals by deluded calls for bipartisanship.

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How far should delinking from Obama go? There is no obvious contender to mount a primary challenge, which is in itself a testimony to Democratic weakness. But the possibility is clearly there, and both will and should become a reality if Obama follows a path of capitulation.