The Last Vacation

By now it’s obvious that George W. Bush, who never quite got the hang of his POTUS job, or what a job is for that matter, can barely be bothered to go through the motions. He had to be pried out of the White House yesterday to deliver two minutes of platitudes about the financial crisis, an appearance Chris Matthews compared to a cuckoo popping out of a clock.

BTW, this is how a real president speaks to the nation about a financial crisis.

Things Are Being Done, but there’s grumbling that they aren’t the right things. I think we’re seeing a lot of fingers poking into a lot of holes in the dyke.

John McCain’s response so far has been so bone-headed that even Sebastian Mallaby is shocked.

John McCain has just demonstrated his vulnerability as a presidential candidate. Speaking from prepared remarks at an Iowa rally today, he said that he would fire Chris Cox, the chairman of the Securities and Exchange Commission. This outburst demonstrates McCain’s ignorance, his impetuousness and his vindictive streak. Not bad for one remark. …

…McCain is a loner rather than a team player. He is a political brawler rather than a manager. The financial turmoil is raising questions about how he’d perform in a crisis.

Are you watching this, America?

Obama’s response:

The Illinois senator said he would be discussing the Fed-Treasury proposal with his top economic advisers on Friday morning. Among those who have been advising Obama on his response to the financial crisis are former Federal Reserve Chairman Paul Volcker and former U.S. Treasury secretaries Lawrence Summers and Robert Rubin.

“Given the gravity of this situation, and based on conversations I have had with both Secretary Paulson and Chairman Bernanke, I have asked my economic team to refrain from presenting a more detailed blue-print of how an immediate plan might be structured until the Treasury and the Federal Reserve have had an opportunity to present their proposal.”

Obama said it was critical that the markets and public have confidence in the Fed and Treasury’s efforts and that their work be “unimpeded by partisan wrangling.”

There’s a lot more to this statement; read at the link.

McCain’s surrogates on the cable television politics shows: “Taxes liberal taxes liberal boogaboogaboogabooga.”

McCain campaign: Barack Obama is black and will steal money from your sweet white grandmother.


Related links:

Sean-Paul Kelley, “The Day Capitalism Died

Joseph Stiglitz, “The Fruit of Hypocrisy

Paul Krugman, “Crisis Endgame

Eugene Robinson, “Failing Econ 101

Update: Why Lehman Brothers crashed.

13 thoughts on “The Last Vacation

  1. I think we’re seeing a lot of fingers poking into a lot of holes in the dyke.

    I believe the administration– even the few smart people in it– was taken completely by surprise this week. I also believe Bush is, perhaps unconsciously, acting out a fratboy-ending-Spring-Break trashing of the country before he leaves office. “Bailouts for everybody!” is a nice mess for the young colored fella to clean up. (I bet every time Bush sees Obama, he envisions him in a train porter’s uniform.)

    45* more days to the election; 77* more to the inauguration; Obama has that long to pull an economic brain trust together. And nothing stirs up shoutfests and fistfights like the economy. Those meetings should be fun.

    *Note: if my math is wrong, this is one reason why I’m not an economist.

  2. Notice how irrelevant the most failed president in American history has become?

    But then the failures of the Republican Party and the bankrupt policies of the last 27 years loom larger than the current president. The drunken party that began in 1981 is over. No one should be fooled by rising prices in the stock market (the stock market last October rose all the way back to 14,000 before the bubble was once again lanced by reality). It’s going to take time to clean up the mess.

    The idea that John McCain or Sarah Palin are capable of handling the crisis would be ludicrous if it weren’t so scary. The fact that McCain is still competitive in the polls tells us that too many Americans have no idea of the nature and size of the crisis we’re in. Now I’m voting for Barack Obama and fully support him. I keep seeing signs that he’s a very capable person. That gives me optimism.

    But there is a problem. The American economy is still winding its way down because of a number of long-term problems that still need to be addressed (they should have been addressed years ago). Those problems cannot be fixed overnight. That means if Barack Obama is elected, the problems are likely to continue to deepen well into his second or third year. If Americans don’t understand what’s happening and the media once again lets Republicans get away with their usual song and dance, we may not see resolution to some of these problems before the Republicans come back to give us more of the same.

    Ironically, there may be hope. I’m being mildly sarcastic as I say this but there’s truth to it: The wealthy journalists and pundits who let the Republicans get away with so much are watching their wealth slip away. They’re getting a hard lesson in voodoo economics. Maybe, just maybe, they are just now beginning to develop some backbone. Things are not pretty these days.

  3. I just caught John Gibson on FAUX, I thought they smoked him? Anyway he is blaming the whole economic meltdown on Obama and his ties to Freddie MAC CEO. (Seems they lent to much money to minorities)

    Well there you have it. It’s all the colored folks and the colored nominee’s fault. Yeah thats what happened, simple isn’t it!

  4. I presume you mean dike

    Maybe not in some neighborhoods of Amsterdam…?

    Anyway. David Gergen was here in Lincoln last night, and he just slammed Bush for being AWOL during the past week. He said some other interesting things too, according to our local paper:

    “The country is better served in time of crisis” by an experienced hand, Gergen said.

    All but one recent president, including those he served, were experienced and widely informed on national and international issues, he said.

    “The one exception is George W. Bush,” he said.

    “People should remember that.”

    In his evening address, Gergen said both Obama and Palin lack a full range of experience.

    “Experience does matter,” he said. “Knowledge matters.”

    Obama reflects “superior decision-making” skills when compared with McCain, he said.

    (Our local paper keeps to one-sentence paragraphs, for its hard-of-thinking readers.)

  5. There was an interesting post on how much the Republicans hate education. Your quotes from Obama scare the hell out of me. He sounds so thoughtful, so intelligent, so willing to think hard and long about hugely complicated, serious issues…What terrible marks against him!

  6. Plugging holes in dikes… yes. But now we have a proposal to pour concrete on the dikes (i.e., get those toxic mortgages out of the market once and for all), which is what’s going to be necessary to keep the whole banking system from collapsing. I will say that Paulson and Bernanke actually do know what they’re doing. Bernanke is one of the world’s foremost experts on the Great Depression and was writing papers about what to do in these kinds of situations while he was in grad school thirty years ago. This is what he spent the past thirty years preparing for (gasp! A competent Bush appointee? Will wonders never cease!). Thing is, he has to time things to make them possible politically. If he had proposed, six months ago, that the Fed and Treasury should buy all those toxic mortgages, he would have been laughed out of Congress, even though he wrote a book ten years ago that proposed such a solution for keeping the banking system solvent during a bubble collapse. Unfortunately what we’re seeing is that the U.S. political system is no longer capable of responding until the situation is one of utter crisis and there’s no choice left, and Bernanke and Paulson have to work within the political system we have, not the one we would want to have.

    In any event: I have thus far been impressed by the way Bernanke and Paulson are handling things. Now you’re saying, “but what they’re doing is a mess!”. No. The situation they were handed is a mess. And there’s no “good” way out of the mess — housing prices are going to have to be pricked back down to pre-bubble prices (i.e. 1998), and the only way to do that is to basically federalize the mortgage system and take those loans off the banks’ hands, else the banking system is bankrupt. The only way to have avoided the mess would have been to gone back in time to 1998 and avoid passing the legislation that allowed the securities markets to fund all those bad loans and thus drive prices into a bubble. But the situation we have is the situation we have, and there seems to be a shortage of time machines. The important thing is to prevent a 1930-1932 nightmare situation with complete collapse of the banking system, near-complete cessation of economic activity, food riots, demagogues proposing fascism as the solution to the nation’s problems and having a real following, and so forth. And in that respect, we have the right men on the job and they’re doing everything that’s politically possible for them to do.

    – Badtux the Economics Penguin

  7. Now we have a proposal to pour concrete on the dikes.

    Fair enough, and also fair enough that it’s do-or-die. But let’s not forget Paulson & Bernanke’s bosses. Dick Cheney, 2001: “Reagan showed us that deficits don’t matter.”

    $700 billion. In case you can’t hear me: $700 billion!

    That’s in addition to the $10 billion per month we pound down a rathole in Iraq, and the FEMA costs for Ike and Gustav and Rita and Katrina (3 years later).

    We can’t keep borrowing from the Chinese, as Bush has done. Obama is going to have to tax the living snot out of wealthy individuals, oil companies, pharmaceuticals– anyone making a remotely healthy profit in these times. He’ll probably end up giving zero tax relief to us working stiffs, as well.

    The good news is, he’ll stay far away from John Sideshow McCain’s plan to turn health care into yet another financial meltdown.

    And here’s an idea: maybe Obama should appoint Paul O’Neill as his Treasury Secretary, and this time let him do his freakin’ job. The guy was smart, and understood 7 years ago where the hell we were headed.

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