Economic Pessimism

Despite Obama's victory, I've remained pretty pessimistic over the last few months about the direction in which our country is heading.

There was a great article (maybe from ABC News) in June or July that basically said: Americans have the sense that everything is going wrong, from a worsening economy to (then) high oil prices to problems in Pakistan/Afghanistan to global warming. The article painted a bleak picture of where we were going as a nation.

Since then, the picture has changed. Oil prices and global warming have moved to the background of our concerns. As the Telegraph (UK) writes in a provocative piece, given the economy,

suddenly it has become rather less appealing that we should divert trillions of dollars, pounds and euros into the fantasy that we could reduce emissions of carbon dioxide by 80 per cent.

The economy is above and beyond any other concerns. And I see no reason to be optimistic. In Paul Krugman's column today, he sums up what I believe will happen:

Here’s my nightmare scenario: It takes Congress months to pass a stimulus plan, and the legislation that actually emerges is too cautious. As a result, the economy plunges for most of 2009, and when the plan finally starts to kick in, it’s only enough to slow the descent, not stop it. Meanwhile, deflation is setting in, while businesses and consumers start to base their spending plans on the expectation of a permanently depressed economy — well, you can see where this is going.

I know the Obama administration will do everything possible to push through the right economic legislation, but the GOP is going to take advantage of Americans' concerns about throwing more money into bailouts and stimulus packages by blocking major Democratic efforts. Anything that goes through is going to be a compromise package that simply won't do enough.

Hopefully I'm wrong, but even with Obama's inauguration in a couple of weeks, I don't have high hopes for the future.