Barack "Herbert Hoover" Obama Announces a SPendign Freeze

Obama Liquidates Himself A spending freeze? That%u2019s the brilliant response of the Obama team to their first serious political setback? It%u2019s appalling on every level. It%u2019s bad economics, depressing demand when the economy is still suffering from mass unemployment. Jonathan Zasloff writes that Obama seems to have decided to fire Tim Geithner and replace him with %u201Cthe rotting... [more]

Obama Liquidates Himself A spending freeze? That%u2019s the brilliant response of the Obama team to their first serious political setback? It%u2019s appalling on every level. It%u2019s bad economics, depressing demand when the economy is still suffering from mass unemployment. Jonathan Zasloff writes that Obama seems to have decided to fire Tim Geithner and replace him with %u201Cthe rotting corpse of Andrew Mellon%u201D (Mellon was Herbert Hoover%u2019s Treasury Secretary, who according to Hoover told him to %u201Cliquidate the workers, liquidate the farmers, purge the rottenness%u201D.) It%u2019s bad long-run fiscal policy, shifting attention away from the essential need to reform health care and focusing on small change instead. And it%u2019s a betrayal of everything Obama%u2019s supporters thought they were working for. Just like that, Obama has embraced and validated the Republican world-view %u2014 and more specifically, he has embraced the policy ideas of the man he defeated in 2008. A correspondent writes, %u201CI feel like an idiot for supporting this guy.%u201D Now, I still cling to a fantasy: maybe, just possibly, Obama is going to tie his spending freeze to something that would actually help the economy, like an employment tax credit. (No, trivial tax breaks don%u2019t count). There has, however, been no hint of anything like that in the reports so far. Right now, this looks like pure disaster. http://krugman.blogs.nytimes.com/2010/01/26/obama-liquidates-himself/ [less]