The idea that Obama made a mistake by focusing on health care instead of the economy seems to be catching on on the left as well as on the right. But my question remains: what are we talking about, specifically?
There was a window early last year when Obama could have pushed for a bigger stimulus and could have pushed for a major recapitalization of the banks with public funds, so as to encourage more lending; that recapitalization would probably have required nationalizing a couple of institutions. At the time, the administration wasn’t at all focused on health care, which it was leaving largely up to Max Baucus.
But Obama didn’t do that. And ever since, it’s been hard for me to see what options are left.
Maybe, maybe, a relatively small job-creation program could have been pushed through this fall. And maybe, if it had been sufficiently unorthodox — say, a job-creation tax credit — it might have had enough bang for the buck to make a noticeable difference.
But aside from that, what? We could have had a lot of speeches about the economy. Would that have helped, absent a policy to make things better?
In my view, there are two defensible hypotheses:
1. Obama was doomed to have a bad economy regardless.
2. He missed a key window, early on, back when some of us were screaming at him to go bigger; but that window closed by the summer of 2009.
Either way, I don’t see how punting on health care would have helped.
Paul Krugmans NYT Blog, 24.1.2010