Daily Archives: January 29, 2010

Bernanke must rebuild confidence. Robert Samuelson, RCP

Bernanke’s exit strategy will fail. Allan Meltzer, WSJ

After Obama’s speech, Democrats are confused. Paul Kane and Shailagh Murray, Washington Post

Deficit hawks and marching peacocks. Paul Krugman, NYT

From my new column for National Journal:

President Obama says he gets the message from Massachusetts. Expect a new focus on jobs and living standards. Expect fresh attention to overgrown public borrowing. The country’s pressing concerns, he says, will be his own priorities.

Fine. Now what? Closer attention to these problems will only underline how little the administration can do to solve them. Saying “jobs, jobs, jobs” does not create any. This is a campaign slogan, not a policy.

The country does not want a second fiscal stimulus. The first was unpopular and another would make the debt problem worse. As for reining in borrowing, there are two ways to do that: lower public spending and raise taxes. When it comes to specifics, people oppose both.

Just what this sharp new focus on the economy is going to achieve is therefore unclear. Caps on student-loan repayments and expanded child care tax credits, as proposed this week? I do not see these turning the economy round. The president calls for a temporary freeze on nondefense discretionary public spending, which is less than 20 percent of the overall budget. Again, not exactly radical — even if it happens.

Are these the bold policies that the health care debate has distracted us from? Obama’s critics say that the focus on health reform was his big mistake. I disagree. In fact, cost control in health care, especially Medicare, is indispensable for long-term fiscal discipline. The White House was right about that. The problem was that its plan raised costs in obvious ways (subsidies, expanded Medicaid) and pressed down too vaguely elsewhere: lots of good ideas and experiments, not enough action. What the administration said about cost control in health care was right in principle but not believable in practice.

It was the correct subject, though…

Clive Crook’s blog

This blog is no longer updated but it remains open as an archive.

I have been the FT's Washington columnist since April 2007. I moved from Britain to the US in 2005 to write for the Atlantic Monthly and the National Journal after 20 years working at the Economist, most recently as deputy editor. I write mainly about the intersection of politics and economics.

Clive Crook’s blog: A guide

Comment: To comment, please register with FT.com. Register for free here. Please also read the FT's comments policy here.
Time: UK time is shown on Clive's posts.
Follow the blog: Links to the Twitter and RSS feeds are at the top of the blog.
Schedule: Clive's column appears in the FT on Mondays and you can read an excerpt of it on this blog.
FT blogs: See the full range of the FT's blogs here.


« Dec Feb »January 2010