Obama is campaigning, at least that's my take on it. And, as with all of Obama's campaign speeches, it's important to listen to what is not there. I like Thoma's remarks on the speech; he quotes Krugman and Delong and adds "this proposal turns its back on those who are still unemployed." And also the people who are being thrown out of their homes and the people who want a trustworthy banking system.
This will become the leftmost marker of Congressional debate, with the rightmost being very far right: the Ryan plan. So what we get will likely be worse than this in significant ways. Obama may be hoping that, like Reagan, he can use his popularity to pressure Congress. With high unemployment and people losing their homes every day, I don't see how. Half the public, maybe, is convinced that cutting social programs will somehow magically restore their jobs, and none of our elected leaders have even tried to kill that zombie idea: maybe it has eaten their brains.
Hard times, no leadership.