The administration has arguably handled the financial collapse competently: Banks are operating, and the financial markets have been unfrozen. It has had less success in addressing the recession. The $787 billion stimulus package passed in February, we were told, would hold unemployment down to 8 percent. It reached 9.5 percent in June, and economists of all political stripes believe it will rise further.
This was predictable -- and widely predicted. Obama let congressional appropriators write the stimulus package, and they larded it with pet projects that won't come on line for years. Immediate deficit dollars were channeled to state and local governments, to insulate public employee unions from the sharp edges of the recession. Obama might have set down markers to Congress, insisting that a larger share of funds be spent much sooner. He declined to do so.
Now he's paying a price. He is deferring again to congressional leaders on fashioning the cap-and-trade bills, and the process is not going well. The cap-and-trade bill has been delayed in the Senate, and senators and congressmen are struggling to reduce the cost of their various health-care bills below the trillion dollar level.
Polls show voters concerned about the prospect of the national debt doubling from about 40 percent to about 80 percent of gross domestic product. And they're increasingly open to the argument that it would be folly to entrust our energy and health-care sectors to the folks who wrote the stimulus package.
There's a contrast here with another president who came to office amid an economic crisis and who instituted vast changes in public policy, Franklin Roosevelt. FDR started off by addressing the economic crisis -- a dangerous downward deflationary spiral -- and didn't leave the details to Congress.
He took the nation off the gold standard, a step that economic historians Allen Meltzer and Ben Bernanke have argued was necessary to economic recovery in every nation in the 1930s. For a time, he even set the price of gold himself every morning.