Monday, June 15, 2009

Obamanomics: Protesting success?

Boy, talk about short memories, said E.J. Dionne in The Washington Post. The business community welcomed the Obama administration’s infusion of billions of dollars when the global economy was teetering on the edge. But now that Obama’s economic recovery efforts are showing some early signs of success, Big Business—led by the Chamber of Commerce—is once more preaching the “old-time religion of bashing government” and worship of unfettered markets.

The “business backlash” was inevitable, said Theo Francis in BusinessWeek, and in fact there are “real dangers” in the Obama team’s “activist investor” approach to fixing the economy: taxpayers hopelessly locked in “lost corporate causes,” pay caps prompting top talent to abandon a company. But business “grousing” about the government could also be seen as a positive sign that we’ve moved from crisis to “something approaching normalcy.”

The “hopeful signs” of recovery should be tempered by concerns about “huge budget deficits,” said the Los Angeles Times in an editorial. As Federal Reserve Chairman Ben Bernanke warned, the government now needs to shift from “stimulus to restraint,” and the efforts by Obama and Congress so far “just aren’t credible.”

Fiscal restraint is the worst thing we could do, said Paul Krugman in The New York Times. The “predictable yet ominous” calls to abandon the Obama rescue efforts might make sense in a normal recession, but the U.S. is in a dangerous “liquidity trap,” and if the government reins in spending now, we’re doomed to repeat the mistakes of Japan in the 1990s and the U.S. in the 1930s.

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