Tuesday, March 4, 2008

Who Are You Gonna Believe Me or Your Lying Bank Accounts?

Well, its finally official, we are not heading for a recession according to President Bush. In a news conference, the President stated that despite those naysayers and dooms-dayers in the economic community our economy is strong. Correct me if I’m wrong, but I don’t think Bush majored in economics or finance during his stellar college career, as a matter of fact I believe he majored in history so now we are suppose to take his economic predictions seriously? Based on his accomplishments so far in the White House he obviously doesn’t remember many lessons from his history classes. So, it comes down to this. What are you going to believe George Bush or your lying bank account?

President Bush said Thursday that the country is not headed into a recession and, despite expressing concern about slowing economic growth, rejected for now any additional stimulus efforts...Bush's view of the economy was decidely rosier than that of many economists, who say the country is nearing recession territory or may already be there.

In the interest of fairness let’s examine the economic evidence. I mean I could be wrong and maybe President Bush knows better than I what the state of the economy is. Maybe he knows better than the leading economic minds in this country. Let’s take a look at some of the leading economic indicators and see if they tell a different story.

OMAHA, Neb. (AP) -- Billionaire Warren Buffett said Monday that the U.S. economy is essentially in a recession even if it hasn't met the technical definition of one yet. Buffett said in an interview with cable network CNBC the reports he gets from the retail businesses his holding company owns show a significant slowdown in purchases...Gross domestic product measures the value of all goods and services produced in the United States and is the best barometer of the country's economic health. A survey released last week by the National Association for Business Economics showed that 45 percent of economists are predicting a recession in 2008...

The implosion of the subprime mortgage market has been rampantly spreading throughout the economy, slamming consumers, banks, investors, even state and local governments to a degree unforeseen by most pundits and analysts and yes, U.S. Federal Reserve officials...And it ain't over: it could last another 12 months, sucking the life out of lending, driving layoffs, and spurring company bankruptcies and bank failures. Some argue a recession has already begun and it could last for some time.

The depth of the crisis hasn't been hit yet if a new study by several prominent economists is correct concluding that unless financial markets can quickly recapitalize, banks are likely to cut back their lending to consumers and businesses by nearly $1 trillion. That will slash economic growth by more than a percentage point over the next 12 months, said the study by David Greenlaw of Morgan Stanley, Jan Hatzius of Goldman Sachs, Anil Kashyap of the University of Chicago, and Hyun Song Shin of Princeton University, released Friday.

So as usual the rest of the world is wrong and George Bush is right, I guess it all depends on your perspective. How will George Bush be affected by a recession? Will he have to make the tough choices of food or gas or medicine? Maybe he will have to put off those badly needed purchases for the ranch in Crawford? Once again President Bush demonstrates his lack of understanding or empathy for average American people or for their intelligence. He obviously believes that if you say it isn’t so then it isn’t so, wasn’t this the same tactic used during the sectarian violence in Iraq?

The problem is that all of those unregulated ploys to prop up the US economy to make George Bush look good are now beginning to pay dividends. I guess you can’t cut the taxes of the wealthy, fund two wars, and spend money like a drunken sailor indefinitely. The incoming President will have so many problems, I find it hard to believe that anyone would want the job. So let’s just ignore the fact that most economists and that one of our titans of business are predicting a recession. Forget the fact that the American consumer has maxed out their spending limits or that the values of their homes are dropping faster than temperatures in Minnesota in December. We must also ignore the fact that the price of oil is at $100 a barrel and that gas prices are predicted to hit and stay at the $4 a gallon mark for most of the summer.

I am not sure what constitutes a recession in the mind of this President but with each and every passing day he is resembling the infamous Herbert Hoover. Depression? What Depression? Of course with the many safeguards in place today we could never repeat that fiasco, but that doesn’t mean that many people aren’t still hurting. To those who are suffering the numbers mean little and the definitions mean even less. In the Never, Neverland of George Bush things are never what they appear to be. Mission accomplished didn’t mean what it looked like it meant, torture wasn’t what it looked like, and domestic spying and immunity definitely a case of your lying eyes. I know I don’t need a bunch of pinheads to tell me when I am doing bad and it looks like neither do the majority of Americans. A rose is a rose no matter what you call it and bad-times are bad-times no matter what you call them.

[1] http://abcnews.go.com/Politics/wireStory?id=4359200
[2] http://www.nytimes.com/aponline/business/AP-Buffett-Economy.html?scp=3&sq=us+economy&st=nyt
[3] http://www.cnbc.com/id/23448021/site/14081545

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