In a move reminiscent to the Bush administration Larry Summers is talking about a second recession if Bush's tax policy is not rubberstamped by democrats...yet again!
It is unprecedented in our lifetime that a president who was swept into office with a huge mandate to change the economic policies of the opposite party ended up consolidating both the fiscal and monetary policy of it's predecessor.
When Ronald Reagan took over, he completely scrapped the previous fiscal and monetary policy giving huge tax cuts to the rich and instituting the most regressive tax on the middle class in the Western World: payroll taxes while appointing a radical free market fundamentalist as chairman of the FED.
When Clinton presented his omnibus budget in 1993 it passed through reconciliation and it passed the Senate with Al Gore's tie breaking vote: it sent an unambiguous market signal that if you are a wealthy individual and you don't find says to invest in Main Street you will end up paying more taxes.
None of this happened under Obama. We have Bush's tax rates with his biased pro Wall Street tax policies and his interest rates with free cash showered on the banks at historically low interest rates. Under these circumstances if you are a wage earner and you want to convince your boss the owner, to invest in your idea instead of giving his money you made him last year to some money manager you not only have to compete with free helicopter money showered by Ben Bernanke's FED on bond holders but you are also competing with the ultra low taxes on investment income and with the new moral hazard instituted by TARP: that is the virtual certainty that if speculative investments go down the bond traders on Wall Street will be bailed out at the expense of Main Street simply because in the aftermath of the collapse banks are more "too big to fail" than ever before.
This is no change we can believe in, at all!