Krugman Warns Of Power Vacuum In Economic Crisis

Paul Krugman warns in the New York Times that President Bush's lame duck tenure could do serious damage to an economy already in a downward spiral:

Everyone's talking about a new New Deal, for obvious reasons. In 2008, as in 1932, a long era of Republican political dominance came to an end in the face of an economic and financial crisis that, in voters' minds, both discredited the G.O.P.'s free-market ideology and undermined its claims of competence. And for those on the progressive side of the political spectrum, these are hopeful times.

There is, however, another and more disturbing parallel between 2008 and 1932 -- namely, the emergence of a power vacuum at the height of the crisis. The interregnum of 1932-1933, the long stretch between the election and the actual transfer of power, was disastrous for the U.S. economy, at least in part because the outgoing administration had no credibility, the incoming administration had no authority and the ideological chasm between the two sides was too great to allow concerted action. And the same thing is happening now.

It's true that the interregnum will be shorter this time: F.D.R. wasn't inaugurated until March; Barack Obama will move into the White House on Jan. 20. But crises move faster these days.

How much can go wrong in the two months before Mr. Obama takes the oath of office? The answer, unfortunately, is: a lot. Consider how much darker the economic picture has grown since the failure of Lehman Brothers, which took place just over two months ago. And the pace of deterioration seems to be accelerating.


[N]othing is happening on the policy front that is remotely commensurate with the scale of the economic crisis. And it's scary to think how much more can go wrong before Inauguration Day.

Joe Klein also makes the FDR comparison, and adds his own frustration:

The problem is that nothing of significance can or will happen until the new President takes office in January, even though there is--finally--a great appetite for action in Washington. This is going to be a very frustrating few months. All of a sudden we understand how our grandparents felt in the winter of 1932-3, waiting for Franklin Roosevelt--and why the inauguration was moved up from March 4 to January 20 thereafter.

Barack Obama's desire to keep a low profile while he fleshes out his Administration is understandable, but frustrating all the same. And George W. Bush's blatant diffidence is annoying, too--not that he has even the tiniest shred of credibility left, but it would be nice if he sort of tried to say or do something comforting in these bleak days. Stripped of bluster, he has become a cipher. So we're left with a void at the top at a moment of real national anxiety. History has resumed, but time seems to have frozen to a dead stop. 2009 can't come soon enough.