It's Too Late Larry

by Steve

Larry Summers, who prevented Barack Obama from even considering a truly effective stimulus package because of cost concerns, now is clamoring for another stimulus package because the one he got hasn't worked. (registration required)

The Obama administration made a strong plea to Congress on Monday to grit its teeth and pass a new set of spending measures – dubbed the “second stimulus” by some economists – in order to help dig the economy “out of a deep valley”.

The call for action, which was made by Lawrence Summers, Barack Obama’s senior economic adviser, who urged Congress to pass up to $200bn (£138.9bn) in spending measures, came at the same time as Mr Obama asked Capitol Hill to grant him powers to cut “unnecessary spending”.

The combined announcements were made amid rising concern that centrist Democrats, or those representing marginal districts, might vote against the spending measures, which include more loans for small businesses, an extension of unemployment insurance and aid to states to prevent hundreds of thousands more teachers from being laid off.

The move comes at a time when last year’s $787bn stimulus is wearing off. Mr Summers argued that it would be a premature move at this stage in the cycle to move to fiscal discipline. “I cannot agree with those who suggest that it somehow threatens the future to provide truly temporary, high-bang-for-the-buck jobs and growth measures,” he said. “Spurring growth, if we can achieve it, is by far the best way to improve our fiscal position.”

It's too late Larry. You were wrong the first time and ignored people like Krugman and Stiglitz. And you are many days late and many dollars short now. You've saddled your boss with a possible double-dip recession, just in time for the Democrats to get drubbed in the midterms, because you thought $1.1 trillion was too much to restart the economy, and threw that extra $300 billion instead on bailing out the crooks who got us into this mess.

There's no reason to listen to anyone in the administration when it comes to economics or financial regulation for that matter, because the whole lot of them are too concerned with what Wall Street thinks and wants, and not concerned enough with what was necessary for Main Street.

I eagerly await a credible progressive challenger to Obama in 2012, not to actually win the nomination, but to at least show voters that the whole Democratic Party is not controlled by Corporate America.