The Best Article on Obama's Economic Performance I Have Read

David Leonhardt has an excellent article on Obama's economic record in the New York Times Sunday Review, its strengths and weaknesses.

He criticizes Obama on three grounds.

• Obama should have immediately filled the two vacant chairs on the Federal Reserve. Had he done so, Leonhardt argues, the Fed would have acted sooner and more aggressively to improve the economy.
• Obama should have included an insurance policy in the stimulus bill that would automatically extend some of its provisions as long as unemployment stayed above a certain threshold.
• Finally, Obama should have been as aggressive in dealing with the housing problem as he and Bush had been when dealing with the banking system.

I find some merit in these observations, with a few caveats.

First, it is unclear to me that Congress would have agreed to automatic triggers extending a stimulus many of them did not like in the first place. A more telling criticism, I think, is that the stimulus could have been more narrowly tailored to have direct stimulative effect. Many of its provisions were laudable and justifiable on their own merits, but had dubious effects on job creation. I am thinking of the measures such as those aimed at high-speed rail, green energy, and encouraging electronic medical records. The stimulus would have had a more profound affect on job creation had it included more infrastructure spending and aid to state and local governments.

Second, the administration tried and failed against GOP opposition to get Peter Diamond on the Fed board. This is not just a story of what Obama didn't do. It is also a story about GOP obstructionism.

Third, the criticism I am most sympathetic to is the one concerning housing. The administration never seemed to have the same enthusiasm for helping main street as they had showed for helping Wall Street. However, even here conservative opposition plays a important role. The initiating event that actually created the Tea Party movement was Rick Santelli's rant on floor of Chicago's Commodity Exchange bemoaning even the meager aid that the administration planned to offer home owners.

However, these are fairly small quibbles. Overall, Leonhardt's article is the best summary I have read of the Obama administration's reaction to the 2008 financial crisis.