What could Obama have done?: I’ve spent a lot of time thinking about ways in which the past few years could have gone differently. I’ve even come up with a few. But none of them lead to dramatically better outcomes today. I can come up with scenarios in which President Obama accomplished somewhat less — perhaps by scaling back the health-care plan — and lost fewer seats in the midterm election. I can come up with scenarios in which the White House accomplished marginally more — perhaps by using the reconciliation process for an energy bill — but paid a greater political cost. I can come up with scenarios in which the stimulus was slightly more visible — perhaps it could have wiped out the payroll tax entirely — or slightly larger or included a long-term deficit reduction component.
But I’ve never been able to come up with a realistic scenario in which a lot more got done, the economy is in much better shape, and the president is dramatically more popular today.
- Use Reconciliation to get a second stimulus through Congress in the fall of 2009.
- Expand the PPIP to do $3 trillion of quantitative easing through the Treasury Department.
- Have a real HAMP to refinance mortgages.
- Use Fannie and Freddie to (temporarily) nationalize mortgage finance, refinance mortgages, and rebalance the housing market.
- Announce that a weaker dollar is in America's interest.
- Nominate a Fed Chair who takes the Fed's dual mandate seriously and pursues policies to stabilize the growth of nominal GDP.
- Appoint Fed governors who take the Fed's dual mandate seriously and support policies to stabilize the growth of nominal GDP.
- Take equity in the banks in January-March of 2009 and keep them from lobbying against financial reform.
- Use Reconciliation to pass an infrastructure bank.
- Use TARP money as a mezzanine tranche to fund large-scale additional aid to states and localities to reduce their fiscal contractions.
I think Ezra is simply wrong. There were a large number of things that Obama could have done--there are even things he could do now, if he wanted to.