Calculated Risk writes:
Calculated Risk: White House Debates Doing Little or Nothing: This is depressing ...from the NY Times: "White House Debates Fight on Economy":
Mr. Obama’s senior adviser, David Plouffe, and his chief of staff, William M. Daley, want him to maintain a pragmatic strategy of appealing to independent voters by advocating ideas that can pass Congress, even if they may not have much economic impact. These include free trade agreements and improved patent protections for inventors. But others, including Gene Sperling, Mr. Obama’s chief economic adviser [argue] for bigger ideas like tax incentives for businesses that hire more workers…
Tax incentives are the "bigger idea"? It sounds like the debate is between doing nothing and doing very little.
If I arrived on the scene today - with a 9.1% unemployment rate and about 4.6 million homes with seriously delinquent mortgages or REO - I'd be arguing for an aggressive policy response.
If Herbert Hoover were president today, he would be using the Treasury and the Federal Reserve to try to fix the housing market and boost infrastructure spending. There is a lot of running room for Federal Reserve and Treasury action to boost the flow of spending even though nothing can get through Congress. FHLB and RFC, anybody?
And your two Federal Reserve governors.