Why Obama Will Win Reelection In 2012

Paul Krugman presents a chart comparing world industrial production in the Great Depression, and the crisis we are in today.

The hyperactive interventionism of the last year of the Bush Administration and the Obama Administration has succeeded (at least for the moment) in preventing a repeat of the Great Depression. Obama will reap the credit. For that reason (plus incumbency) Obama is likely to win reelection in 2012.


Now, I thought all this hyper-interventionism was a bad idea in the long run, leaving all sorts of moral hazards in the market place, not to mention a grotesque deficit. Better to let the Lehman Brothers and Goldman Sachs of the world collapse. Needed reforms will be postponed, or never implemented, permitting the contagion to run wild again in a few years. The banskters are still reaping ridiculous bonuses on Wall Street and there is little that can be done about it.

But you can see why Obama decided to save the banks at all costs and let the chips fall where they may. It might have been emotionally satisfying to see ruin befall the corrupt on Wall Street, but it was the only way in the short-term to preserve people's legitimate investments there.

And as I mentioned a couple of weeks ago, my 401K is recovering. If I had been President, and followed my own advice seeking ruination for the rich, this recovery would not have happened so soon. Obama will reap the credit.

Provided recovery continues, by the time 2012 approaches (whether health reform succeeds or fails), the nation will be so grateful that Obama will win reelection in a landslide.