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Should Obama Have Demanded A Big New Stimulus? Eh.

I completely agree with the economic case on the need for greater stimulus. I sort-of agree with the political argument that President Obama blew it by not passing a larger stimulus then the one he did. (If he proposed, say, a $2 trillion stimulus, maybe the moderates would have considered the moderate thing to do knocking it down to $1.5 trillion. On the other hand, maybe they would recoiled and have killed it altogether.)

The part of the argument that I don't agree with is the notion that Obama should be demanding new stimulus now, or should have been demanding it for the last year. Paul Krugman's column today encapsulates what I find unconvincing:

The Fed needs to stop making excuses, while the president needs to come up with real job-creation proposals. And if Republicans block those proposals, he needs to make a Harry Truman-style campaign against the do-nothing G.O.P.
This might or might not work. But we already know what isn’t working: the economic policy of the past two years — and the millions of Americans who should have jobs, but don’t.

This is kind of a throwaway at the end of the column, but it echoes a fairly common argument, which was also made in a recent TNR editorial. The problem is that it begins as a policy argument (we need more stimulus) which is true. But then it quickly acknowledges that Congress won't pass more stimulus, so it switches to a political argument (Obama should attack Congress for opposing more stimulus.)

So now we're not really arguing about what to do about the economy. We're arguing about political messaging. But it's pretty clear that the concept of economic stimulus is unpopular. People think it's a big waste of money. So what is the value of devoting a lot of presidential energy to an unpopular message? There's no real evidence that sustained presidential rhetoric can change people's minds on issues where they've formed an opinion.

Obama's approach to this problem is to try to break up "stimulus" into individual measures that command public support, like a payroll tax cut. Krugman argues that he's

proposing some minor measures that would be more symbolic than substantive. And, at this point, that kind of proposal would just make President Obama look ridiculous.

A large new stimulus is also symbolic, since it has no chance of passing. Even a small stimulus probably won't pass, but it's imaginable. Even if you assume that bite-sized measures have zero chance, that means you're just choosing between different symbolic measures. What's the point of advocating for an unpopular symbolic measure instead of a popular one?

I'm not saying the current course is good. When the only thing you can do about the economy is both unpopular and D.O.A. in Congress, there just aren't a lot of tools available.