A Tale Of Two Economies: Bush, Bernanke Differ On Where US Is Heading

On the same day, President Bush and Federal Reserve Chief Ben Bernanke gave two very different assessments of where the US economy is going. Bush was Mr. Positive while Chairman Bernanke's testimony forewarned of the pain to come. Read excerpts from the two takes below.

Bush:

President Bush said Tuesday the nation's troubled financial system is "basically sound" and urged lawmakers to quickly enact legislation to prop up mortgage giants Fannie Mae and Freddie Mac. He also called on the Democratic-run Congress to follow his example and lift a ban on offshore drilling to help increase domestic oil production.

Amid soaring gas prices, the toughest real estate market in decades, falling home prices and financing that's harder to come by, Bush said: "It's been a difficult time for many American families." But he also said that the nation's economy continues to grow, if slowly.

Bush said that despite the woes of Fannie Mae and Freddie Mac and the recent government takeover of California bank IndyMac, U.S. depositors should not worry because their deposits are insured by the government up to $100,000

Bernanke:

Federal Reserve Chairman Ben Bernanke told Congress Tuesday the fragile economy is facing "numerous difficulties" despite the Fed's aggressive interest rate reductions and other fortifying steps.

At the same time, Bernanke, testifying before the Senate Banking Committee, sounded another warning that rising prices for energy and food are elevating inflation risks. This problem looms even as officials try to cope with persistent strains in financial markets, rising joblessness and housing problems.

Comments

[Alethea]

Oh joy.

Not only do I have a front row seat watching my own company go under due to the bad economy, but I just found out my sister is probably going to lose hers too.

Colorado Springs, home of Focus on the Family, has been under Republican control for decades. And guess what? They're almost broke. They haven't raised taxes in ten years and now they are suddenly discovering that they can't pay for anything - my sister's payroll included. They are cutting back EVERYTHING except the barest essentials like police and firefighters. My sister, who only wanted to serve her community and do what's best for family are now facing the great scary unknown of unemployment. My sister did a lot of good for Colorado Springs. And now they will all be worse off for losing her as a public servant.

And all because some Republicans chose to ignore the fact that costs increase as time goes on. And that sometimes, SOMETIMES raising taxes is just the right thing to do for their community.

Isn't this what you Republicans were hoping to accomplish? Isn't this what you always dreamt of? No taxes, no government? Congratulations you've done it!

Never mind all the people you leave broken in your wake...

[6WaysToSunday]

Altehea,

I know of your fear and feel your pain as my wife lost her job last October, a harbinger of the big time $hit yet to come. Fortunately, she found a better, more secure job shortly thereafter. I pray the same good fortunate falls on you and yours, and the millions of others who are under enormous financial hardship.

What hurts the most is that we the people kept/keep voting their Rethuglian butts into office (with due deference to the 2000 Florida election stolen by the Supreme Court, Katherine Harris, and Jeb Bush). It is the American public who is accountable. Too many numbly buy into their fabricated, slanderous, fear mongering, xenophobic, racist and misogynist innuendos.

Those of us who have been and continue to be so opposed to Repug tactics need to do more to defeat the Neocon beast. We must take an active role.

[sa]

i thought the ultimate goal of capitalism
was to privatize everything?
why the bale out of fannie mae/freedie mac?

(and why are mega corporate banks given cutie-pie names
like they are just good ole country folk - and not cut throat
corporate monoliths - are we expected to believe we could just go over
and borrow a cup of sugar?)

so our taxes are going to the bale out of banks -
what are their ceo's pay?

i say if the government bales out a company,
the ceo makes one dollar that year,
and perhaps must go down with the ship
and forfeit retroactive years of pay -
how could he be rewarded for sinking the ship?

rather than the government stepping in to reward bad behavior,
let the justice system step in and take the ill-gotten gains from
all those at the helm, and redistribute them.


also this: when the government gives a giant corporation money to keep going,
even though they've failed (a false notion, or a lie of business or capitalism),
isn't that - socialism, or communism?


p.s. we are all watching a dying star (americorp) become a blackhole,
sucking all matter and life into its vortex. (capitalism in its deaththroes).

p.p.p.s goodnight and goodriddance.

[wild1a]

The wealth of America, based on the production of goods and savings, used to provide the purchasing power that supported the economy. Due to the outsourcing of American manufacturing, and skilled and semi-skilled jobs this has been replaced by borrowing to buy products and services. The total federal debt presently amounts to 9.4 trillion dollars. The total debt of all public and private debt in the US is 53 trillion dollars, or about $175,000 for every man, woman and child in the US. Since a large part of the wealth that used to be created in the US has diminished purchasing power is increasingly supported by credit instead of earned income or savings. 80% of total debt has been created since 1990 which is coincident with the surge of globalization. We as a nation are in debt to the tune of 4 to 5 time our Gross National Product " the amount of goods and services we produce in one year. Our credit debt is not decreasing " it is increasing every day. How long can a family, or individual or nation survive with a credit debt of 4 to 5 times income? Our leaders seem intent on spending more borrowed money, mostly overseas, rather than dedicating themselves to salvage the ruin of our once great country. (info from financial web sites)

[Soulsurfer]

Once again, I'm struck by the fact that a fifth grader from that stupid show would present a better speech than our so-called president. How painful to watch this maroon stutter and stumble his way through the most simplistic language possible, while its obvious he can hardly wait to get off the stage and back to his mountain bike. Did our country really re-elect this clown for a second term? How embarrassing.

[Flagal]

not just embarrassing but downright scary

[OlderWoman]

Perhaps in Bush world.

[LaFeminazi]

Consumer prices jump 1.1 percent in June
Wednesday July 16, 8:38 am ET
By Martin Crutsinger, AP Economics Writer
Consumer prices surge in June at fastest pace in 26 years, reflecting soaring energy costs

-------

Yay!

Good news at last

Oh

Ooops

;)

[ms.understood]

Whose economy is he looking at, China's?

[gopindrag]

He's looking at the economy of America's wealthiest 300,000. For example, Fannie Mae and Freddie Mac are in need of corporate welfare, our tax dollars, but the CEO's of those two outfits were padi about $15 MILLION each last year. And the economy those 2 old rich white guys represent is doing fabulously, thank you very much.

[LaFeminazi]

Banks

Don't worry

The Government will save you.

Who says socialism is dead.

;)

[loudspeaker]

When Obama and McCain talks about the economy, I can feel that Obama knows what to do to fix it. Don't you feel the same?

[ugmold]

No, I think it is all talk and the FED won't let it happen

[k6007]

Time to rebuild our own economic infrastructure.
Buy, save, and shop....................LOCAL!

[LaFeminazi]

Especially when all the shops are congregated in malls as far away as possible to be car friendly.

The whole system needs rethinking.

Energy tsunami coming, ex-policymakers warn
Wednesday July 16, 7:53 am ET
By H. Josef Hebert, Associated Press Writer
http://biz.yahoo.com/ap/080716/wise_men_energy.html

[lornejl]

How can it be that every troll is immune from high gas prices, groceries prices,college tuition's,medical insurance, big losses in home equity and a stock market in the tank ?

[LaFeminazi]

Lobotomy at birth.

[Midnightrain]

Oh that's it? I was wondering ...lol

[kay]

All they're doing is discrediting themselves.

Case in point: Wachovia IS in some trouble. It was in trouble yesterday, and it's in trouble today.
Investors knew it yesterday, and depositors will figure it out today.

Shouldn't the banks get in front of this? Just give people the figures and tell them how they're shoring up reserves? Don't they really have to do that, ethically, and then take the risk that depositors will flee? After all, it's THEIR money.

I don't know how individuals operate rationally without accurate information.

[Midnightrain]

You're points are spot on, except panic will speed up the downturn. I understand wanting to bide the time. If people start taking their money out of the banks en masse, just think about the possible after effects ...

[kay]

I don't really buy that. We're talking about individuals. They didn't sign on to any "let's shore up Wachovia!" plan.

If the risk has increased, they should know about it. If they decide that risk is too great to be borne, well, tough luck for Wachovia, and it's shareholders.

It's their INDIVIDUAL decision. Perhaps the bank should have gotten in front of it, rather than waiting for some analyst to spill the beans.

[Flagal]

I did so yesterday. If everything turns out well, great. If it doesnt I wont be standing in line hoping to get my cash.

[Soulsurfer]

Banks, if memory serves me correctly, are required by law to keep on hand 10% of their total deposits. The rest is out in investments or whatnot.

[Torus34]

Any day now all that money which has gone to the rich through tax breaks is going to trickle down to those of us who inhabit the lower economic regions and all will be well again.

Cargo cult, anyone?

[bumpersticker]

The trickle is yellow.

[tomhuggan]

You mean, flying in the cargo (luggage) section for a discount?

[Midnightrain]

I'm just glad that fallacy is being exposed so that no other dumb politician can use it as political leverage, or dumber American will ever believe it, ever again.

[LaFeminazi]

Phew, and there was I beginning to get worried.

[Flagal]

Bu-sh / Che-ney have filled their rich friends and donors coffers to overflow. That was always their intention, with the rest of America be dammed.
What is amazing is that Mc-kane has any support whatsoever sincve he is more of the same (perhaps worse on economics). It clearly shows O-bama has some issues to deal with before he can get elected.

[tomhuggan]

There are many people out there. Millions. Who are afraid of the future and the changes coming. What is beautiful and blessing for one segment of the population is ugly and scary for another.

[Midnightrain]

It clearly shows that the American psyche has some issues to deal with before we're ready to turn this sinking ship around.

[Flagal]

agreed

[MaeScott]

My parents grew up during the Great Depression. It had a profound effect on their subsequent view of money and markets. Both of them kept hidden cash stashes " because you can never tell what will happen and you might not be able to get your money." When my aunt died I found she had done the same thing.

Guess what I'm doing now.