Paul Krugman, writing in the NYT, Failure to Rise, expresses a lot of disappointment in Obama’s response so far to our economic crisis. Krugman says, “Mr. Obama’s victory feels more than a bit like defeat. The stimulus bill looks helpful but inadequate, especially when combined with a disappointing plan for rescuing the banks.”

In Krugman’s judgment the stimulus package is not nearly large enough. He says, “For while Mr. Obama got more or less what he asked for, he almost certainly didn’t ask for enough. We’re probably facing the worst slump since the Great Depression. The Congressional Budget Office, not usually given to hyperbole, predicts that over the next three years there will be a $2.9 trillion gap between what the economy could produce and what it will actually produce. And $800 billion, while it sounds like a lot of money, isn’t nearly enough to bridge that chasm.”

Krugman says, “The plan sketched out by Tim Geithner, the Treasury secretary, wasn’t bad, exactly. What it was, instead, was vague. The effect was to kick the can down the road. And that’s not good enough. … So far the Obama administration’s response to the economic crisis is all too reminiscent of Japan in the 1990s: a fiscal expansion large enough to avert the worst, but not enough to kick-start recovery; support for the banking system, but a reluctance to force banks to face up to their losses. It’s early days yet, but we’re falling behind the curve.”

In Krugman’s view, Obama must become much stronger. “There’s still time to turn this around,” he says, “but Mr. Obama has to be stronger looking forward. Otherwise, the verdict on this crisis might be that ‘no, we can’t.’”

Interesting article in The Nation, Looting Social Security, by William Greider, says that “an impressive armada” of forces are lining up to pressure President Obama to make big changes in Social Security, Medicare and Medicaid that will drastically whack benefits to America’s elderly and needy.

Greider points out that in 1983 Social Security tax was raised to 12.4 percent, split between employees and employers, and as a result, the Social Security system has accumulated a vast surplus–now around $2.5 trillion and growing. This money, of course, has already been used by the federal government — over $200 billion each year.

Greider says, “Follow the bouncing ball: Washington first cuts taxes on the well-to-do, then offsets the revenue loss by raising taxes on the working class and tells folks it is saving their money for future retirement. But Washington spends the money on other stuff, so when workers need it for their retirement, they are told, Sorry, we can’t afford it.”

The idea of reducing Social Security benefits is being financed by Peter Peterson, an 82 year old Republican financier who made a fortune doing corporate takeover deals at Wall Street’s Blackstone Group. Perterson has committed almost $1 billion to this campaign and with his money has enlisted a number of foundations, think tanks, and economists to support his cause.

“Peterson’s proposal would essentially dismantle the Social Security entitlement enacted in the New Deal,” says Greider. “Peterson is financing a media blitz. His tendentious documentary–I.O.U.S.A.–opened in 400 theaters and was broadcast on CNN with appropriate solemnity. Last September Peterson bought two full pages in the New York Times to urge the next president to create a ‘bipartisan fiscal responsibility commission’ once he was in office (Peterson was for John McCain). This group of so-called experts would be authorized to design the reforms for Congress to enact. But Peterson does not want Congress to have a full, freewheeling debate on the particulars. The reform package, he suggests, should be submitted to a single ‘up-or-down vote by Congress, as is done with military base closings.’”

Greider says, “The Social Security fight could become a defining test for ‘new politics’ in the Obama era. Will Americans at large step up and make themselves heard, not to attack Obama but to protect his presidency from the political forces aligned with Wall Street interests? This fight can be won if people everywhere raise a mighty din–hands off our Social Security money!–and do it now, before the deal gains momentum. Popular outrage can overwhelm the insiders and put members of Congress on notice: a vote to gut Social Security will kill your career.”