NYT columnist and Nobel laureate Paul Krugman thinks FDR can be an inspiration for the Obama administration — but he thinks Obama needs to go further than FDR did in spending to revitalize the economy:
The political lesson is that economic missteps can quickly undermine an electoral mandate. Democrats won big last week â€” but they won even bigger in 1936, only to see their gains evaporate after the recession of 1937-38. Americans donâ€™t expect instant economic results from the incoming administration, but they do expect results, and Democratsâ€™ euphoria will be short-lived if they donâ€™t deliver an economic recovery.
The economic lesson is the importance of doing enough. F.D.R. thought he was being prudent by reining in his spending plans; in reality, he was taking big risks with the economy and with his legacy. My advice to the Obama people is to figure out how much help they think the economy needs, then add 50 percent. Itâ€™s much better, in a depressed economy, to err on the side of too much stimulus than on the side of too little.
In short, Mr. Obamaâ€™s chances of leading a new New Deal depend largely on whether his short-run economic plans are sufficiently bold. Progressives can only hope that he has the necessary audacity.