The Corner

From Catastrophe to Not so Bad?

Washington is by nature an hysterical place. (Remember those who chest-thumped the fall of Saddam’s statue only soon to claim they never supported the war?)

Still, it is quite striking that in the space of a mere 50 days, Obama & Co. have gone from “We are in 1932 and things are getting worse—unless” to “Things are not as bad as we think,” with choruses from the likes of Larry Summers on the dangers of talking down the economy and sowing fear. This is one of the most schizophrenic moments in recent memory. What in the heck is going on?

a) Premeditation: Talk of the Great Depression was necessary to enact a massive spending bill with a $1.6 trillion deficit; then, once the European-like spending was in place, it was important to flip, drop the gloom and doom, and talk up the economy for the midterm elections to come.

b) Panic: After trashing the rich, Wall Street, the banks, George Bush, etc., promising massive new tax hikes, and shrilly forecasting the likelihood of impending near-depression, Barack Obama was quietly taken aside by his advisers (in response to the worries of now-troubled liberal financial icons) and told to cut it out—lest he create such a climate of financial uncertainty that we really do get the hard times of the 1930s. So he stopped on a dime and suddenly 1981, not 1932, is the new frame of reference.

c) Chaos: No one is in charge; things are made up and cobbled together as we muddle through each day. When the market dives, and banks totter, like the proverbial headless chicken, the inexperienced administration darts about as if we were doomed. Then, with a mere couple of days of good news from Wall Street, or the announcement that a few banks are okay after all, or that GM doesn’t need more handouts right now, suddenly we get “Things are not so bad.”

Or is at all of the above?

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