Regardless of the debate over secret money, one thing remains clear – the majority party is suffering because of a 9.6% unemployment rate, as any majority party would suffer from under similar circumstances. And the Obama Administration took a brief respite led mainly by inventory restocking to believe that a broad-based recovery was underway, and they simply took their eye off the ball. It was around this time, in November/December of last year, that we started hearing talk of deficit reduction and spending freezes coming out of the White House. There certainly wasn’t any talk of fiscal stimulus at that point, even though economists inside and outside of the White House knew that the Recovery Act was too small. And there was a retrenchment back to accomplishments made in Congress that were completely overshadowed by the topline jobs number.

Even Matt Yglesias, prone to defend the Administration on what they could have done better, understands that there were other options available to them.

When unemployment is high, offices and storefronts are vacant, and factories are running below capacity, it doesn’t take any bright new entrepreneurial ideas to increase production. You just need to do a better job of mobilizing the resources that exist. Get the people who aren’t working into jobs, and they’ll fill up the offices and crank up the factories [...]

A party whose leaders realized that economic results were the most important driver of public opinion wouldn’t have renominated a conservative Republican to head the Federal Reserve. Even more astoundingly, having given Ben Bernanke a second term in office, the Obama administration didn’t get around to nominating anyone to fill the other vacant posts on the Federal Reserve Board until April 2010. Then, once the nominations were made, Senate Democrats didn’t speed the hearings and confirmation process along. One of Obama’s nominees, Peter Diamond, actually managed to win a Nobel Prize in economics while still languishing in confirmation limbo.

Similarly, the extent of stimulus possible in the American Recovery and Reinvestment Act was famously limited by the need to gain Republican support. Given that, shouldn’t someone have put reconciliation instructions into the budget resolution that would have allowed for additional stimulus to be undertaken by majority vote? Instead, Senate Democrats wound up spending much of 2010 in painstaking negotiations with a handful of New England Republicans, desperately trying to eke out a few more dollars.

Even now, as the Federal Reserve finally plans a belated stimulus, they have in recent days characterized it as a measured, slow, gradual approach – which has immediately deflated Wall Street investor hopes that they have grasped the problem and will act with purpose. That’s a function of not having the kind of people given to do what’s necessary in charge.

Still, I would add a couple things to Matt’s story. First, the Senate could have tried to pass a $154 billion dollar stimulus that the House passed before Scott Brown got seated, with 60 votes in the Senate. This bill became a $15 billion dollar package once Harry Reid got around to it. Keeping the zombie banks alive has been a lead weight on this economy. It’s true that recoveries from financial crises have been historically slow, but that’s more a function of a timidity among policymakers and an inability to break the backs of the financial oligarchy who stand to lose their riches than some immutable fact of history. The decision not to fire bank management, curtail compensation and bonuses or make an example through prosecution of anyone connected to the greatest fraud in the history of the capital markets is a mistake we’re still paying for. The same in the foreclosure crisis. The design of HAMP was entirely at the discretion of the Administration and the Treasury Department. They made it servicer-run and at the servicer’s discretion. They led to the governing of the program by companies who have wrong-way incentives to foreclose instead of help keep people in homes. The economic disruption caused by foreclosures is immense – we simply can’t have a recovery with well over a million families evicted annually.

Tangible economic conditions caused this mess for the Democrats. Tangible steps to improve those conditions were neglected. If that continues, the misery for the party in power will also continue, starting at the White House.