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Losing the 'lost decade': Obama turned off the 'emergency' siren in speech to Congress

By Ward Harkavy in Congress, Featured, Obama Drama
Wednesday, Feb. 25 2009 @ 10:50AM

For such a reasonable-sounding guy, MIT economist Simon Johnson is intent on busting some heads.

Earlier this month, he called for busting up what he called "the American oligarchs" by going all Teddy Roosevelt on the banking industry: Instead of bailing out banks, bring back antitrust laws.

At the New Republic, the headline on Johnson's post about President Barack Obama's speech last night was "Bust the Slump First."

Johnson recalled Obama's powerful warning earlier this month at his first prime-time conference (video above) of a "lost decade" and a "profound economic emergency."

That emergency hasn't lessened, and Johnson reminds Obama of that, taking him to task in a reasonable, gentle way:

It was a good speech to Congress on Tuesday night. The tone was positive. The longer run vision was clear and well-articulated. But how do we avoid a decade long global economic slump? And when will the president lay out and begin to build support for his full slump-avoidance strategy?

Much harsher on Obama, I tried to make the same point last night:

It was more than a little galling, however, that, regarding the recession and impending Great Depression II, Obama spoke as the bombs had stopped falling and our big problem was how to get out from under the rubble.

Referring to Obama's platitudinous vow to "rebuild," I noted:

That's a trope made for prime-time TV. That's all it is. What he no doubt has been told by his advisers but neglected to say was that not only have the bombs not stopped falling but also that we ourselves are still in free-fall and will keep falling for a while.

Over at Baseline Scenario (Johnson's excellent blog), his associate James Kwak notes this morning:

I think Simon and I agree that the speech was strong on long-term issues, but did not shed much-needed light on how we can emerge from our short-term challenges.

One way to position this is to say that if we really are facing a potential "lost decade," then talking about the long term is a bit premature.