Simon Johnson on how things could turn quickly for Obama:

What this conventional wisdom misses is that we experienced a severe credit crisis of the kind more typically seen in recent decades in middle-income emerging-market countries. The U.S. can recover quickly -- and jobs can come back much faster than expected -- but only if the dollar now depreciates.

Like it or not, significant dollar depreciation is more probable than most now suppose. The depth of the crisis in late 2008 stunned many U.S. observers, but its features were fairly obvious to people who have worked in Russia, Mexico, Argentina, or South Korea. Similarly, the recovery can share some characteristics with what those countries have experienced.

Korean Rebound

We shouldn’t anticipate any kind of immediate growth miracle in the U.S., but just keep in mind that after its economic collapse in 1997-98, South Korea grew almost 11 percent in 1999, while Russia -- written off in economic terms after its currency, public finances and banking system effectively collapsed in the fall of 1998 -- still managed a 6.4 percent expansion in 1999 and 10 percent in 2000.

The main reason the U.S. isn’t bouncing back so fast is because of exports and the dollar. South Korea, Russia, and other emerging markets that go through severe crises usually undergo a sharp depreciation in the inflation-adjusted value of the currency, making them hypercompetitive, at least for a while. This makes it easier to replace imports with domestic goods and services and much more attractive to export.

In contrast, the global financial crisis actually strengthened the U.S. dollar as it was seen as a haven, although the dollar has fallen somewhat from its recent peak against major trading partners.