[UPDATE below.]

Over at EconLog Bryan Caplan writes:

Two years ago, I was worried by the "Obama as FDR" scenario. That cloud is lifting. Now two alternate scenarios for Obama keep coming to mind.

Scenario #1: Obama as Carter. He'll ineffectively stick to his guns, seem weak, become a one-term president, and be replaced by a Republican who pulls the plug on a lot of accumulated statist nonsense.

Scenario #2: Obama as Clinton. He'll move to the center, let his opponents shoot themselves in the foot, win re-election, and preside over four more years of salutory gridlock.

Take your pick.

I'm not sure why Bryan is calm. I guess it's because of the loss in momentum on health care "reform" etc. in the wake of Scott Brown's election.

I agree that Leviathan's juggernaut has been slowed for various reasons, but I still think this will go down in history as the second Great Depression. The government has already set in place several mechanisms for keeping the economy in the toilet, and for ramping up its power, when the public demands it in the next crisis.*

And there will be a next crisis.

More generally, if we really have turned the corner, and we just go on from here with output steadily expanding and unemployment slowly moving down, then I think we free marketeers have been spending way too much effort on economic freedoms. If all the stuff the government/Fed have already done really just spell two years of harsh recession, then what's the big deal? We should be focusing on civil liberties or war or adult literacy or neutering your pets or something.

UPDATE: * In the original text I said the public would demand huge government interventions during the next crisis, but that's actually inaccurate. Really, what I think will happen is the public will be terrified and then the government will ram through an outrageous new set of measures, saying it is necessary to pull back from the brink. Even if people are very much opposed, they won't start rioting (a lot) because the situation is so dire. Over time, once the new measures are a fait accompli, the public's memory of what happened will be shaped by the official narrative offered by "both sides" in the media. This is exactly what happened with TARP, which you may recall was rejected around 9-to-1 by constituents phoning their Congresspeople back in 2008.