Bush and his aides are quick to point out that they oversaw 52 straight months of job growth in the middle of this decade, and that the economy expanded at a steady clip from 2003 to 2007. But economists, including some former advisers to Bush, say it increasingly looks as if the nation's economic expansion was driven to a large degree by the interrelated booms in the housing market, consumer spending and financial markets. Those booms, which the Bush administration encouraged with the idea of an "ownership society," have proved unsustainable." The housing market was mostly the construction of new houses, about 800,000, with 600,000 houses being sold. That leaves quite a few left over for when the boom began to go south, and now that mortgages are being foreclosed and people have no jobs, there's much less consumer spending, and who will buy a financial product from a company that was run by Henry Paulson and his friends?
Looking back at the months of anxiety in Washington and across the country over America’s financial straits, Mr. Bush said, “I readily concede I chucked aside some of my free-market principles when I was told by chief economic advisers that the situation we were facing could be worse than the Great Depression.”
This is from Paul Krugman's column in the New York Times: " On Saturday, Christina Romer, the future head of the Council of Economic Advisers, and Jared Bernstein, who will be the vice president’s chief economist, released estimates of what the Obama economic plan would accomplish. Their report is reasonable and intellectually honest, which is a welcome change from the fuzzy math of the last eight years.
But the report also makes it clear that the plan falls well short of what the economy needs.
According to Ms. Romer and Mr. Bernstein, the Obama plan would have its maximum impact in the fourth quarter of 2010. Without the plan, they project, the unemployment rate in that quarter would be a disastrous 8.8 percent. Yet even with the plan, unemployment would be 7 percent — roughly as high as it is now.
After 2010, the report says, the effects of the economic plan would rapidly fade away. The job of promoting full recovery would, however, remain undone: the unemployment rate would still be a painful 6.3 percent in the last quarter of 2011.
Now, economic forecasting is an inexact science, to say the least, and things could turn out better than the report predicts. But they could also turn out worse. The report itself acknowledges that “some private forecasters anticipate unemployment rates as high as 11 percent in the absence of action.” And I’m with Lawrence Summers, another member of the Obama economic team, who recently declared, “In this crisis, doing too little poses a greater threat than doing too much.” Unfortunately, that principle isn’t reflected in the current plan.
So how can Mr. Obama do more? By including a lot more public investment in his plan — which will be possible if he takes a longer view. "