Now Obama owns the economy -- so the economy fear-mongering must end. As top White House economic adviser Larry Summers told the Brookings Institution, "We need to instill the trust that allows opportunity to overcome fear and enables families and businesses to again imagine a brighter future." In what he called "the central paradox of financial crisis," Summers observed "that while the problem was caused by excessive complacency and excessive optimism, what we need today is more optimism and more confidence."
That sounds like a column I wrote last September when I thought Democrats were being overly pessimistic about an economy that had been wounded by a government loan to AIG (then $85 billion), a $30 billion bailout in May for JP Morgan to buy Bear Stearns and the pricey shoring up of mortgage giants Fannie Mae and Freddie Mac. Clearly, I was wrong about looming damage of overly swapped bad credit and Wall Street panic.
Six months later, two Washington administrations have thrown another $2 trillion into the pit -- and some Democrats are arguing that more spending is needed to stimulate the economy.
On the one hand, I think Summers is right. Fear and panic are stalling an engine that still has plenty of kick left -- but it won't start purring until the public believes again.
Now that they're on the running-things side, Obama and company are learning that it's a lot easier to kick the economy than to jump start it. Too bad that they were a lot better at kicking it.
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