Paul Krugman offers the reelection campaign, and all of Obama's supporters, a very clear summation of what happened, what didn't happen, and what should have happened.
What happened is pretty simple: Obama came into office facing, in effect, a crashed financial system, close parallel to the 1930's run on the banks. For an economy fueled by easy debt, that was fatal. Then, of course, the (debt-fueled) housing boom suddenly bust. And finally the crash brought the guillotine down on consumers who were carrying debt that had been running at grimly spectacular levels during the Bush presidency.
(Bush told us not to worry about war, remember? He told us to just go out and spend... Miss him yet?)
When you take the indebted consumer out of the consumer economy, you're in trouble. The moment we had to pay back our debt was the moment we stopped buying. Result? An economy that had been fed by money we didn't actually have went very pale and thin.
"Now, you may have noticed," says Krugman,"that in telling this story about a disappointing recovery I didn’t mention any of the things that Republicans talked about last week in Tampa, Fla. — the effects of high taxes and regulation, the lack of confidence supposedly created by Mr. Obama’s failure to lavish enough praise on “job creators” (what I call the “Ma, he’s looking at me funny!” theory of our economic problems)."
("Job creators," an awkward phrase anyway, seems doubly awkward for Republicans to use. They are, after all, trying to elect a man who is known for firing people and, if they had their druthers, they'd fire every public employee.)
Meanwhile, we're still in territory where household debt is too high. Where Obama failed, to the extent that he did, was his inadequate response to debt. Keeping homeowners afloat would have fueled a faster economic recovery.
... We should have had strong policies to mitigate the pain while households worked down their debt, as well as policies to help reduce the debt — above all, relief for underwater homeowners. The policies we actually got were far from adequate. Debt relief, in particular, has been a bust — and you can argue that this was, in large part, because the Obama administration never took it seriously. ...Paul Krugman
But housing is coming back.
And, for the rest, Obama did the right thing. When he could. When Republicans weren't deliberately standing in the way of recovery.
...Obama did push through policies — the auto bailout and the Recovery Act — that made the slump a lot less awful than it might have been. And despite Mitt Romney’s attempt to rewrite history on the bailout, the fact is that Republicans bitterly opposed both measures, as well as everything else the president has proposed.
So Bill Clinton basically had it right: For all the pain America has suffered on his watch, Mr. Obama can fairly claim to have helped the country get through a very bad patch, from which it is starting to emerge. ...Paul Krugman, NYT
In other words, when job figures once again show painfully slow recovery, you can thank Republicans for the "painfully slow" part and and you can thank Obama for "recovery." I'd just as soon that recovery continues for four more years. Republican economics may taste sweet, but they turn out to be poison every time.