"L" not "V" shaped recovery 
(or Obama was smokin' some of that Hawaiian green shoots)

DeLong : More Evidence That Obama Tacked in the Wrong Direction at the End of 2010...

… and replaced a team where at least some key senior players knew what they were doing with one in which nobody in the inner circle did.

...

I'm sorry, but no. Even if you think in 2009 that there will be a "V"-shaped recovery, you take steps in 2009 so that you can do the needed policy in 2010 if the "V"-shaped recovery does not materialized. You:

• Make sure the chair of the Federal Reserve does not regard the avoidance of absolute deflation as a reason to sit on his hands.
• Make sure the Fed chair is backed up by governors who understand the Federal Reserve's dual mandate.
• Prepare to do quantitative easing via the Treasury by using TARP authority money as mezzanine financing.
• Prepare to do infrastructure investment via the Treasury by using TARP authority money as mezzanine financing.
• Prepare to intervene in the housing market on a very large scale by getting Fannie and Freddie in shape to do so.
• Pass a budget resolution early in 2010 so that you can do expansionary policy via Reconciliation later on if you need to.

Those are six things you do in 2009 (and at the start of 2010) to prepare for an "L"-shaped recovery. Obama did zero of them.

Tim Duy (via Mark Thoma):

"Sure, we can argue that Republican intransigence is the core policy problem. But at the same time, the Administration had no back-up plan for an L-shaped recovery, joined the fiscal austerity parade, and continued to place faith in reaching a "Grand Bargain" on the debt rather than focusing on the issue at hand - the unemployment crisis."

Yglesias:

Recessions, you can see, happen when total nominal spending growth dips. But it normally bounces back. During 2009, however, we had an unprecedented collapse in total nominal spending. What’s more, the 2010 “recovery” year was just as bad as normal recession years. So now look at the large and growing gap between the actual path of total nominal spending and the 5 percent trend growth rate:

This is what’s not accounted for in the Bernstein/Romer projection. There is no X-Force driving convergence to the long-term trend. The failure of the X-Force to materialize has nothing to do with the fact that the Commerce Department initially underestimated the depth of the recession. The existence of the X-Force was a modeling assumption, not an empirical calculation. And I think it’s an assumption that’s best understood as an assumption about the stance of the Federal Reserve—a view that the Fed, with its words and deeds, would push us back up to the trend leaving Congress with the responsibility for safeguarding human welfare during the transition. It’s an assumption that I think anyone familiar with Ben Bernanke’s academic work would have shared, so I understand why Romer especially (who shares my view of the situation) espoused it. But of course she’s gone, and I’m not sure that references to “headwinds” from Europe fully accounts for the depth of the problem here.