Department of Huh?!?!

Moron blogger at "Tiny Revolution" twatted in reference to Lizza's Obama piece that "Krugman wasn't illusioned or ever a real ally. And on any non-crazy ideological spectrum, he's actually not especially liberal."

Krugman calls his blog "Consience of a Liberal." And the moron blogger Jon Schwartz wrote a stupid post about Hitchens, bin Laden, and the Palestinians, basically stupid lefty rationalizations and "contextualization" for the terrorist attacks. His type just brings our side down and should be frowned upon even if they'll cry "hippy puncher!"

Atrios sort of echoes Schwartz which is why I don't like "ultras," and Firebaggers who believe Obama's health care reform was a sell out or that Obama just bailed out the banks.

Lizza writes:

He offered the President four illustrative stimulus plans: $550 billion, $665 billion, $810 billion, and $890 billion. Obama was never offered the option of a stimulus package commensurate with the size of the hole in the economy––known by economists as the “output gap”––which was estimated at two trillion dollars during 2009 and 2010. Summers advised the President that a larger stimulus could actually make things worse. “An excessive recovery package could spook markets or the public and be counterproductive,” he wrote, and added that none of his recommendations “returns the unemployment rate to its normal, pre-recession level. To accomplish a more significant reduction in the output gap would require stimulus of well over $1 trillion based on purely mechanical assumptions—which would likely not accomplish the goal because of the impact it would have on markets.”

Paul Krugman, a Times columnist and a Nobel Prize-winning economist who persistently supported a larger stimulus, told me that Summers’s assertion about market fears was a “bang my head on the table” argument. “He’s invoking the invisible bond vigilantes, basically saying that investors would be scared and drive up interest rates. That’s a major economic misjudgment.” Since the beginning of the crisis, the U.S. has borrowed more than five trillion dollars, and the interest rate on the ten-year Treasury bills is under two per cent. The markets that Summers warned Obama about have been calm.

Summers also presumed that the Administration could go back to Congress for more. "It is easier to add down the road to insufficient fiscal stimulus than to subtract from excessive fiscal stimulus," he wrote. Obama accepted the advice. This view—that Congress would serve as a partner to a popular new President trying to repair the economy—proved to be wrong.

At a meeting in Chicago on December 16th to discuss the memo, Obama did not push for a stimulus larger than what Summers recommended. Instead, he pressed his advisers to include an inspiring "moon shot" initiative, such as building a national "smart grid”—a high-voltage transmission system sometimes known as the “electricity superhighway,” which would make America’s power supply much more efficient and reliable. Obama, still thinking that he could be a director of change, was looking for something bold and iconic—his version of the Hoover Dam—but Romer and others finally had a “frank” conversation with him, explaining that big initiatives for the stimulus were not feasible. They would cost too much, and not do enough good in the short term. The most effective ideas were less sexy, such as sending hundreds of millions of dollars to the dozens of states that were struggling with budget crises of their own.

Lizza seems to be saying the facts showed that Krugman was right. These inside reportage tend to give a better view of Obama. He wanted a "moon shot" or to nationalize Citibank.

Obama should have done what the insouciant FDR when it came to going off the gold standard and blowing off his advisers who were horrified when he finally did it. Instead Obama listened to Summers, Orszag, and according to the memo to "Senior Federal Reserve" officials meaning probably Bernanke and Geithner. They warned that too big of a stimulus would "spook" the public.

In China they didn't worry about spooking the public, they just went ahead and did it.