Paul Krugman beats me by 23 minutes with his "Shoulda Coulda Woulda" post--and, besides, I think it is better than mine.
Shoulda Coulda Woulda: on the Obama issue, I still think that the administration has made four serious misjudgments.
I think that it has paid too much attention to the short-run political risks of taking unpopular positions versus the medium-run political risks of having a lousy economy....
The administration made what I continue to believe was the awful decision to pretend that the half-measures it was actually able to get were exactly right, not a penny too small. Would it have made a difference in 2010 if Obama had been able to say to the country, “I asked for more aid to the economy, but those guys blocked it, and that’s why we’re not recovering faster”?...
It’s one thing to recognize that there’s only so much you can do; it’s another to adopt the arguments of your enemies. Since some time in the fall of 2009, Obama’s rhetorical stance has been basically that he’s like the GOP, but less so; can you even remember him offering a full-throated defense of Keynesian policies?
While the White House doesn’t set Fed policy, it does get to appoint Fed governors. Why are there all those vacant seats? Why weren’t there recess appointments?
The administration could still recess-appoint Fed governors. And--even without the cooperation of the Federal Reserve--the Treasury does, I think, still have the power to (temporarily) nationalize housing finance.
The scariest thing I have heard--well, not heard, but that was related to me--is that one of Obama's most senior economic advisors is now saying that NEC meetings are really peaceful now that there are no professional economists in the room. That strikes me as a very bad sign for policy rationality: given the central projections as of now and given the downside risks to the forecast, NEC members should be running around with their hair on fire...