Friday Roundup, Musings On the Economy

Both Paul Krugman and the NYTimes editorial page put a 2nd stimulus back on the table. 

Edward Schumacker-Matos takes a deeper look at what is happening in Honduras. 

Huffington Post features the much-discussed Matt Taibbi piece on Goldman Sachs. 

Leon Wieseltier takes a hard look at Obama, the realist.

From a communications standpoint I think the President is going to have to return to a much more elemental discussion of his strategy to create long term growth and broad-based prosperity, explaining how the stimulus, the auto bailout, his financial regulatory plan, health care reform, energy and climate legislation, the foreclosure initiative, new credit card regulations, immigration reform, the G20 process, a completed DOHA round all add up to a comprehensive approach to tackling the most important set of problems facing the nation - our weakened economy, our struggling people, an ailing and worsening global economic outlook. 

There should be no doubt now that ushering in a new era of domestic and global prosperity should be the primary organizing principle of the Obama Presidency.   While he and his team may have avoided a global collapse earlier this year, the global financial system is still very weak, and as Rob Shapiro often says, still very vulnerable to additional shocks.   As we saw in the 1930s a sustained global downturn can lead to nasty geopolitical problems.  And it is hard to imagine the President maintaining broad support for his agenda at home if the domestic economy continues to get much worse. 

As I wrote the other night one thing that I think is essential in this next stage of our conversation about future prosperity is a new rhetorical frame for what we are trying to do.  The President has used two incomptable phrases to describe his strategy - "recovery," and "new foundation."  This tension has to be reconciled, and as I have suggested, the concept of "recovery" should be abandoned for a new vocabulary that adequately describes and attacks an economy that has been underperforming for average Americans for far too long.  The "new foundation" language is closer to what is required but still not there yet.  

In poll after poll the American people see the economy as the overwhelming priority for those in power.  And they are right of course.  The President needs to take a step back, and re-engage dramatically here and abroad on a new economic crusade, or face the prospect of getting little credit for all his hard work to make historic reforms in our health care, climate and energy policies this year.

Oh, and by the way, buried deep in your paper this morning is this exciting little nugget - at some point in the next few weeks we wiil have had twice as many banks fail and be seized by the FDIC this year than in the last two years, combined.