Morning Bell: The Obama Economy is Failing

Conn Carroll / July 08, 2009

Celebrating his first 100 days in office, President Barack Obama told the American people: “One hundred days ago, in the midst of the worst economic crisis in half a century, we passed the most sweeping economic recovery act in history…One hundred days later, we are already seeing results.” And he’s right, we are. Unemployment has risen to 9.5%, stocks fell to their lowest level in 10 weeks on Tuesday, and consumer credit delinquencies have hit a record high. Responding to the obvious failure of the Obama administration’s $787 billion stimulus package, some liberals in the House and Senate are calling for a second (really the third, when you count President Bush’s 2008 effort) stimulus. How big of a second stimulus? Center for Economic and Policy Research co-director Dean Baker told Politico: “To my mind it’s pretty obvious we need another stimulus package, probably a lot bigger than the last one.”

To be fair, the Obama administration itself is not yet ready to admit their first $787 billion stimulus package failed. Both Vice President Joe Biden and Obama Council of Economic Advisers member Austan Goolsbee recently said it was premature to discuss crafting another stimulus. But outside adviser to President Obama Laura Tyson told an audience in Singapore yesterday that the stimulus package was indeed “a bit too small” and that the administration should consider a second effort. According to Bloomberg, Tyson then stressed that “[t]he U.S. needs to communicate its determination to reduce the annual shortfall once the economy recovers.” Unfortunately, the Obama administration is sending no such credible signals. (more…)