Not that it wasn't obvious before, but it's apparent from the Bai piece that the Obama people figured that the economy would turn itself around just fast enough that everything would be OK. But that just doesn't happen in all recessions, and more than that there were plenty of reasons to see that the usual tool, monetary policy, just wasn't going to do the trick. Normal expansionary monetary policy works through the banking sector which, in case you hadn't noticed, is a wee bit dysfunctional these days. Even if it wasn't, interest rates were already pretty low and because of the zero bound there just wasn't much wiggle room. The Fed did do nontraditional things like buying up bits of big shitpile, but that was more about propping up that dysfunctional banking sector than actually turning the economy around.
Maybe somebody should do something?
