How Larry Summers sold President Obama too small a stimulus

From Noam Scheiber at the New Republic:

What happened? When Romer showed Summers her $1.7-to-$1.8 trillion figure late the week before the memo was due, he dismissed it as impractical. So Romer spent the next day or two coming up with a reasonable compromise: $1.2 trillion. In a revised document that she sent Summers over the weekend, she included the $1.2 trillion figure, along with two more limited options: about $600 billion and about $850 billion.

The final version of the memo had framed the debate around two basic choices—roughly $600 billion and roughly $850 billion—and these were the focus of the conversation.“

Neither the memo nor the meeting would have given Obama reason to suspect this amount was arguably $1 trillion too small.

In the end, the significance of the fateful document has as much to do with what wasn’t in it as what was. Though Obama was never going to propose a $1.8 trillion stimulus, and Congress certainly wasn’t going to pass one, the president may well have felt a greater sense of urgency had he better understood how far he was from the ideal.

One quibble. Scheiber has no idea whether or not Congress would have passed a larger stimulus because no one tried. Remember, this was back in the days when the administration tended to cave first and ask questions later. Never in a million years did it occur to them that they held the upper hand coming off a landslide election, an opposition party in ruins, and a public fearful for their economic lives. Had the President told the American people what was needed and why, and run a scorched earth policy against any Republican who challenged him, rather than trying to be the GOP’s bff, we may have gotten the stimulus we needed.

Then there was the need to defend the stimulus after it passed. I know the administration thinks they did defend it. But I would argue, and have, that at that point in the game the President wasn’t truly willing to fight for much of anything wholeheartedly (because it would require being “mean”), and his advisers either didn’t understand political PR, or the President was so holding them back, that whatever they did do wasn’t good enough. Either way, it wasn’t inevitable that they’d lose the debate.

They’ve gotten better at the game now. But don’t confuse the inability to fight with an inability to win.


Follow me on Twitter: @aravosis | @americablog | @americabloggay | Facebook | Google+. John Aravosis is the editor of AMERICAblog, which he founded in 2004. He has a joint law degree (JD) and masters in Foreign Service from Georgetown (1989); and worked in the US Senate, World Bank, Children's Defense Fund, and as a stringer for the Economist. Frequent TV pundit: O'Reilly Factor, Hardball, World News Tonight, Nightline & Reliable Sources. Bio, .

Share This Post

© 2014 AMERICAblog News. All rights reserved. · Entries RSS