Here's a great description of Obama and Biden:

"Listen... do you know about the two kinds of fools?"

"Plain and damn?"

"No..." Karkov grinned and began. "First there is the winter fool. The winter fool comes to the door of your house and he knocks loudly. You go to the door and you see him there and you have never seen him before. He is an impressive sight. He is a very big man and he has on high boots and a fur coat and a fur hat and he is all covered with snow. First he stamps his boots and snow falls from them. Then he takes off his fur hat and knocks it against the door. More snow falls from his fur hat. Then he stamps his boots again and advances into the room. Then you look at him and you see he is a fool. That is the winter fool.

"Now in the summer you see a fool going down the street and he is waving his arms and jerking his head from side to side and everybody from two hundred yards away can tell he is a fool. That is a summer fool."

(Hemingway, For Whom the Bell Tolls)

It was only three months ago that Paul Krugman, in his Times column and on his blog, was giving it to the Obama administration almost as hard as he gave it to the Bush administration. He appeared on the cover of Newsweek as the poster boy of the angry left. He could not have been more emphatic: The stimulus was too miserly to make a dent, the financial bailout was a trillion-dollar giveaway, and the banks would have to be nationalized, à la Sweden...

Today, Krugman's message is: Stay the course. By "the course," does he mean the one that previously had us headed over the cliff?

Not all that much has changed since March other than the fact that the stock market has been on fire and key economic indicators are no longer quite as dire as they once were. Neither of the issues that Krugman deemed most critical have changed at all — the stimulus hasn't been expanded, nor have any banks been nationalized.

But last week, Krugman himself sparked a rally in the stock market — according to Bloomberg, anyway — when he told an audience at the London School of Economics that "I would not be surprised if the official end of the U.S. recession ends up being, in retrospect, dated sometime this summer."

Whoa. How did he get from there to here?

It should be noted that in the wake of the Newsweek cover, Krugman started quietly backpedaling a little. He even offered the administration the crumb of a compliment: "I don't believe that even America's economic efforts are adequate, but they're far more than most other wealthy countries have been willing to undertake."

Then the White House had him over for dinner, along with that other economist-thorn-in-Obama's-side Joseph Stiglitz. (As Politico reports today, the Obama White House has engaged in "aggressive outreach" toward the Times editorial page in general.) The conversation between them and the Obama economic team was off the record, but the White House's "engagement" policy sure seems to have worked, at least so far as Krugman is concerned. Ever since, he has played nice...

Vice President Joe Biden said Sunday that "everyone guessed wrong" on the impact of the economic stimulus, but he defended the administration's spending designed to combat rising joblessness.

Biden said inaccuracies in unemployment predictions shouldn't undercut the White House's support of the $787 billion economic revival plan that has not met the expectations of President Obama's team.

Thanks to Joe Hopkins in Shanghai.

Posted by Donald L. Luskin at 1:00 AM | link