John Hockenberry, the Takeaway: This week marks the 100th day of the Obama administration. Our partner, the New York Times, has a poll out today that's favorable to the president as he takes on a huge economic crisis. But there's one man who thinks Obama is not doing such a good job. He's New York Times columnist and Nobel-Prize-winning economist Paul Krugman. Paul, we're now in the 100th day of the Obama administration. Do you have any advice for Barack Obama in his next 100 days?

Paul Krugman, Nobel-Prize-winning economist: Yeah, I think he's got to be more vigorous about dealing with the economy. I understand that there are political constraints but he really hasn't made the case to the public for why we really need almost certainly a bigger stimulus bill, why we need to spend a lot of money on fixing the banks. And they're trying right now to make it, to go with almost no additional resources. And, it's not enough. Basically, he's running the risk of having his agenda, which I support very much, undermined by a really disappointing economy and he's got to get this thing moving.

John Hockenberry: Let's take apart those two pieces. One is the stimulus package and I'm struck by the lack of huge ideas in the stimulus package. I'm reminded of the FDR period in the 1930's when LBJ went at FDR with a rusty rake and said, "I want funding for rural electrification, I want funding for rural electrification." And that crazy idea became the basis for a transformative moment in American history that they spent a lot of money on, changed America politically and economically. But those kinds of ideas aren't in this stimulus, and I'm wondering why.

Paul Krugman: Well, I'm 80 percent sympathetic to the administration on this because you do want this to hit fast. Remember that we have an economy that is contracting rapidly as we speak — we're losing 600,000 jobs a month. Projects that won't really get going for three years are not unfortunately going to do very much to address the clear and present danger. And the trouble with really big ideas is, by and large, they take a long time to get going. So, it was inevitable that the stimulus would focus on very conventional stuff, on basically filling potholes. That said, yeah, there should be more of that, partly because we need stuff, partly because all indications are that this crisis is going to go on for quite a while and stimulus that comes late will not be wasted, and partly I think just for inspiration. I'm supposed to be a hard-headed economist here, but I think there's been a notable lack of inspiration about the whole economic recovery package. It's been too much and we haven't had those great soaring speeches that we know the president could do so well about really rebuilding America.

John Hockenberry: Intuitively as Americans look abroad, and of course everyone remembers a year ago the Chinese Olympics and the sparkling cities of China that we saw there, why is it that cities in Asia seem so sparkling and futuristic and cities in the United States, even Chicago and New York, seem more of a throwback, less concerned with the kinds of changes and building that you think America would be concerned about with a stimulus package this large.

Paul Krugman: We have in this country been starving of public investment for almost 30 years now. Ever since Ronald Reagan declared that government is the problem not the solution, there's been a steady nickel-and-diming-down of the infrastructure projects that contribute so much to that sparkling feel of Asian cities. Now that doesn't mean that every project you can think of ought to be approved, but we really haven't kept up. We've been doing bits and pieces. We've been basically avoiding collapse in our infrastructure. Sure, again, where is the visionary side? Where is the "we're going to build the city of tomorrow?" There's been none of that really in the United States under any president for a generation now, and I guess a lot of people had hoped for more of that from Barack Obama.

John Hockenberry: But you're scaring me now. You suggest that even with this stimulus package in place and the kind of numbers that they're batting around in Washington, you don't see it reversing the trends that were begun with Ronald Reagan.

Paul Krugman: No, remember we're talking about a stimulus bill that at its maximum will spend about 2.5 percent of gross domestic product. And a lot of that will be infrastructure. A lot of that will be simply aid to state and local governments as a way of helping them avoid cuts in spending. Some of it will be in the form of tax cuts. This is not anything remotely on the scale of Roosevelt's WPA, and of course even that wasn't enough to really decisively end the Great Depression. You have to have some perspective here. Eight-hundred billion dollars seems like one heck of a stimulus bill, but in a $15 trillion economy, with that spending spread over three years, it doesn't look so large when all is said and done.

John Hockenberry: Well, let's talk about the banks then. When you said that the Obama administration can be criticized for attempting to save the banks, and I think I'm quoting you correctly here: "with essentially no additional resources." As you look at the bank bailout you don't see additional resources brought to bear here, that they're attempting to do this with cash on hand?

Paul Krugman: Well it's a little bit funny. What they're doing is they're taking what's left of the TARP, that original $700 billion pot of money that was approved on the previous administration, and they're trying to leverage that up through some fancy footwork. They're going to invite in private participation, they're going to get the Federal Deposit Insurance Corporation stepping way outside its normal role to guarantee a bunch of debts. So strictly speaking, yeah, they are actually going to put taxpayers on the hook for a substantial amount of money if the plan gets going, which is itself a question, but they're not going back to Congress and saying, "OK, look, this wasn't done right, it wasn't sufficient. Here's our plan to fix the banking system, we know you guys are going to hate this, but it's going to require that you pass a bill authorizing us to spend another $700 billion or something like that." Instead they're saying, "Well, we're going to take the residual authority that we have from a bill that was passed way back in October of 2008, and we're going to leverage that up by taking a very generous interpretation of what the FDIC is already supposed to do, and we're not going to go back to Congress for anything more." It would be surprising given the depth of the problem if that kind of doing-it-on-the-cheap approach was going to be enough and I don't think it will be.

John Hockenberry: So doing it on the cheap in cost-terms but also doing it on the cheap in terms of political courage. Do you think the Obama administration is intimidated by Congress, doesn't want to go to Congress, doesn't want to do the work that's required to get the consensus to come up with these big numbers?

Paul Krugman: They certainly haven't tried. I mean, the whole modus operandi of the administration has been to guess what they think they can get through Congress, and ask for that and no more. And there's been no attempt to push the envelope, no attempt to get more. So the stimulus bill wasn't designed to pass Congress. I think they were surprised to discover they weren't getting any Republican support anyway. Even though, I think their own economist, I don't know this for sure, but I'm sure their own economist said, "This really doesn't look big enough." And they've done nothing in terms of asking for bank authority. So, yeah, the whole approach really has been one of what Bush used to call negotiating with yourself. They start by saying what they think they can get, and then they say, "Let's ask for a bit less for that" and it never gets to the point of them actually pushing it. I'm sure that Rahm Emanuel would say, "I'm just naïve, I don't understand it, this really can't be done," but it's been striking that Obama, who certainly looks like the great persuader, hasn't really tried to do very much persuading on the issues.

John Hockenberry: So, your advice for the next 100 days would be why don't we have the first 100 days.

Paul Krugman: To some extent, yeah.

John Hockenberry: Now I'm crying.

Paul Krugman: Look, lots of things have happened. The stimulus bill is a whole lot better than not. This is immensely better than what might have happened under a McCain-Palin administration. There has been a significant increase in confidence, you don't want to dismiss that. People are feeling a lot better about the direction of the country because they feel that we have good people in charge. All of that's to the good, but it hasn't been the blizzard of real change that a lot of the president's supporters were hoping was going to happen.

John Hockenberry: Call him Blizzard Man. Paul Krugman, Princeton University's Economics and International Affairs professor, the 2008 Nobel Prize winner, author of the "Return of Depression Economics and the Crisis of 2008," and a columnist for our partner the New York Times.