Things may be looking up:
Cleaning Up the Economy, by Paul Krugman, Commentary, NY Times: Bill Clinton’s speech at the Democratic National Convention was a remarkable combination of pretty serious wonkishness ... and memorable zingers. Perhaps the best of those zingers was his sarcastic summary of the Republican case for denying President Obama re-election: “We left him a total mess. He hasn’t cleaned it up fast enough. So fire him and put us back in.”
Great line. But is the mess really getting cleaned up? The answer, I would argue, is yes. The next four years are likely to be much better than the last four years — unless misguided policies create another mess. In saying this, I’m not making excuses... Job growth has been much slower and unemployment much higher than it should have been...
Now,... in telling this story about a disappointing recovery I [won’t] mention any of the things that Republicans talked about last week in Tampa, Fla. — the effects of high taxes and regulation, the lack of confidence supposedly created by Mr. Obama’s failure to lavish enough praise on “job creators” (what I call the “Ma, he’s looking at me funny!” theory of our economic problems). Why the omission? Because there’s not a shred of evidence for the G.O.P. theory of what ails our economy, while there’s a lot of hard evidence for the view that a lack of demand, largely because of excessive household debt, is the real problem.
And here’s the good news: The forces that have been holding the economy back seem likely to fade away in the years ahead. ... Does this mean that U.S. economic policy has done a good job? Not at all.
Bill Clinton said of the problems Mr. Obama confronted on taking office, “No one could have fully repaired all the damage that he found in just four years.” If, by that, he meant the overhang of debt, that’s very much the case. But... The policies we actually got were far from adequate. Debt relief, in particular, has been a bust — and you can argue that this was, in large part, because the Obama administration never took it seriously.
But, that said, Mr. Obama did push through policies — the auto bailout and the Recovery Act — that made the slump a lot less awful than it might have been. ...
So Bill Clinton basically had it right: For all the pain America has suffered on his watch, Mr. Obama can fairly claim to have helped the country get through a very bad patch, from which it is starting to emerge.