After Rats Leave, the Ship Still Likely to Sink

Paul Rahe, no amateur observer of the political scene, puts Christina Romer's departure in context. I should have commented further since I have been saying she should go for some time. Anyway, Rahe clearly thinks what is happening is #2 on the world famous NBfPB Obama Unravel Path. I do too, naturally. The conspicuous avoidance of Obama on the campaign trail is further evidence. My very early call on businesses essentially hiding out in the face of a war on business launched by the Obama administration and the Democrats is now officially accepted thinking, and I don't see much room for improvement - nobody in business thinks Obama and the Pelosicrats are going to wake up one morning, understand the consequences of their destructive policy and shrill rhetoric, and reverse course. So businesses will stay hunkered down and wait it out until new cards are dealt in Novemeber, although I would caution not to see November as a sufficient event regardless of what happens. Even if the Republicans make significant gains, the nation will have only stopped the momentum of destructive policy (any maybe not even then, as it depends on what kind of Republicans take over). We need to turn back and go a good distance the other way on economic policy before we see any robust improvement. For that, we may need to wait until Obama is history. I don't see an Obama White House working constructively with a Republican House and/or Senate to move back toward freer markets and smaller, less onerous government. So we could have two years of a muted gridlock that, while welcome, is still overshadowed by another looming all-important election, that of 2012.