Today the Bush administration finally acknowledged what many have seen coming for months - a recession. It reminds me of the fat lady that went to the emergency room complaining of stomach pains. Turns out she was having a baby. "Goodness me, how did that happen?" Not only did she not know she was pregnant but she couldn't remember how she got that way. The politicians come out with their thinly disguised phrases and platitudes. Fred Thompson called it a "slow patch". Doesn't really matter what you call it. The failure to deal with it speaks volumes of the incompetency of this CFR run government.
Earlier this year on Jan 4th Bush anounced that:
"Financial markets are strong and solid" and "this economy of ours is on a solid foundation, but we can’t take economic growth for granted,” Bush said. “And there are signs that will cause us to be ever more diligent and make sure that good policies come out of Washington."At the same time David Rosenberg at Merrill Lynch announced:
The U.S. economy has entered into its first major recession in 16 years according to David Rosenberg, chief North American economist for Merrill Lynch, who declared the downturn in a research note to clients released on Monday. Mr Rosenberg wrote: "According to our analysis, this [recession] isn't even a forecast any more but is a present day reality."Clearly one of these people doesn't have a clue. Merill Lynch ought know as it was their irresponsible investment in the risky subprime market (as well as many other) has had a lot to do with this "rough patch". I think they've lost @15 billion so far.
He points to the four key barometers used by the National Bureau of Economic Research (NEBR) - employment, real personal income, industrial production, and real sales activity in retail and manufacturing. He wrote that these "seem to have peaked around the November-December period, strongly suggesting that we are actually into the first month of a recession."
On January 8th the administration trots out Treasury Secretary Henry Paulson on CNBC on a propaganda tour with a bunch of charts designed to convince people that the subprime mortgage crises really wasn't as bad as all that. Paulson had said in a speech in New York that the current housing correction was “inevitable and necessary” following five years of an unsustainable boom which saw sales and home prices hit record levels. What a joke these people are. No body is talking about investigating how this mess was created because they all are invested in it. Ed Kramer of Mad Money is the only one that seems to really get the level of fraud and dishonesty that is rampant in the good 'ol boys club of Wall Street and Washington and the FED these days. Business as usual.
Now Bush comes out today talking about another massive tax cut needed to stimulate the economy? Do you mean for the ""financial markets are strong and solid" and "this economy of ours is on a solid foundation"? If it's so strong and solid why do we need a massive tax cut to try and jolt us out of a recession that doesn't exist? In just two weeks it has deteriorated that much? To be honest proposing that a tax cut is going to help solve the current financial crisis (which is what it is) is tantamount to malpractice - but then they are professional politicians with their hands deep in Wall Street's pockets.
Now I don't have a problem with tax cuts but to suggest that they are going to solve this financial crises is silly. If Washington does not even understand the problem how can they fix it? The republican bobble heads will most likely soon all begin the tax cut mantra and I expect the democrats will also chime in - but only for the poor and middle class. How do tax cuts address the dishonesty and greed in the mortgage business? How do they address the ignorance of people that took out these subprime loans. How do they address the problem of illegals getting loans they don't qualify for to buy property they can't afford and really shouldn't own? How does it address the irresponsible actions of the FED under Greenspan which fueled this whole fake housing boom? How do they address the chronic problem of the government spending money it doesn't have for social programs we can't afford? How do they address the trade deficit which is the source of many of our economic problems.
Until these real problems are addressed intelligently and free from political ideology we will suffer. There are many other factors to this problem. Inflation and the soaring cost of commodities food and fuel are just a few. Washington is corrupted by the same rot that is infecting Wall Street and our financial institutions and the FED. Profit without moral guidance or the limitations that it imposes on greed of corporate America. Well, Corporate America is running our government and we see how poor a job they really do.