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

[Flagal]

alaintex See Profile I'm a Fan of alaintex
Isn"t the US and everyone who lives here blessed?

We have had the strongest economy in the world for almost all of our lifetimes, and when a slight downturn occurs, we can still pi$$, moan and complain about how bad it is. Even though it"s still 4 times better than the next best country. I'm so thankful to be alive in this time and place.


Do you have a 200k I could borrow indefinitely?

[izzat7]

Agreed, most Americans have not been outside this country- I think they would be surprised .

[IowaKid]

How can you blame the democrats when it has been republican controlled, Bush, Senate and House up until 2006. Sorry someone better start playing the other side of the record.

[rollingdivision]

And what has the Democratic controlled house and senate done since 2006?

[robodweeb]

Suffered over 70 Republican filibusters.

[CARTERJ]

If his performance as President is any indicator, if he says the economy is good, then it is most assuredly bad.

[tomhuggan]

exactly. if a person consistently lies, then you can believe the opposite of what they say.

[Flagal]

And thats the truth.

[Flagal]

Yesterday I took all cash out of my bank account. Put it under my mattress so to speak. I left a thousand bucks just to keep my account open. I will pay my bills with money orders. That's how much faith I have in our current govt. They could care less about the common man & woman. This was made crystal clear by Bu-sh's ramblings yesterday.

[robodweeb]

CBS Poll:

Opinion of McC: Favorable 31%, unfavorable 32%

[rollingdivision]

The facts don't lie, there is no recession, continued growth. Change in real GDP predicted by the Fed 2008, 1.0 to 1.6 percent growth; 2009, 2.0 to 2.8 percent growth and 2010, 2.5 to 3.0 percent growth, no recession here.

At the June policy meeting, officials projected that the rate of economic growth by the end of the year would be between 1% and 1.6%, up from 0.3% to 1.2% in their April estimates. The 2009 outlook was unchanged, with officials expecting growth between 2% and 2.8%. The figures are the "central tendency" of the projections, a range of estimates from 17 sitting policy makers excluding the three highest and three lowest. They were released today with Fed Chairman Ben Bernanke"s semi-annual monetary policy report to Congress.

Expectations for the unemployment rate, now 5.5%, was unchanged at 5.5% to 5.7%.

[IowaKid]

You can't convince me. My stocks have lost value every since Bush went into office and it has never rebound.

[tomhuggan]

As Twain would say, "there's lies, damn lies, and statistics".

[biwee]

If the real inflation rate was applied to GDP growth, it would show we are in a recession. The latest indication of inflation at the wholesale level was 9.2%. Bernanke's forecast of 4.2% inflation
for the year is a joke.

[rollingdivision]

Is there some evidence to support the "If the real inflation rate was applied to GDP growth, it would show we are in a recession.­" claim? And is there a new definition of recession available from the government with this new definition?

[bumpersticker]

You say "Facts" don't lie, then only use "predicted," "projected," "outlook," "expecting," - none of which are facts. This administration has a tendency to see a future that fails to become fact. Was it predicted, projected, outlooked,expected that oil would be at these levels, that the mortgage situation would be this dire, that GM and others would be fighting for survival, or more importantly that the massive debt would add to the instability as creditors lose confidence in the US as a place tyo buy debt instruments?

[rollingdivision]

You can go right to the Fed report and see the facts for yourself, there is no recession. It's not even close. http://federalreserve.gov/boarddocs/hh/2008/july/0708mpr_part4.htm

BTW the hedging language reflects the way the Fed writes their reports, the story is based on the Feds predictions, projections, outlook and expectations as documented in this report.

[tomhuggan]

As Mark Twain said, to be quoted, "there's lies, dam lies, and statistics".

[Crowhaul]

The most incredible - and unintended - ramification of Bush's press conference yesterday was that the price of light, sweet crude dropped by almost $10.00 a barrel when Bush, practically forced by a reporter into suggesting that consumer conservancy 'is a good thing', stated that we should drive less and not use our 'air conditioners when we're not home'.

So just follow this: Bush utters one or two lines about us cutting back on things and the price of oil drops like a stone.

Following this strange peritpeteia, just imagine what might actually happen if this administration had the balls to begin a domestic campaign aimed at reducing our collective usage of resources. Imagine Bush calling for a dedicated national agenda of cutting back on resource usage. The day-trading oil speculators would be looking for a new job. And we'd be back to $3.00 a gallon gas prices in no time. Very good news for the US public. The downside? Bush wouldn't have the crisis he needs in order to invade our public lands for private drilling..­..

[Flagal]

The U.S. has had huge cuts in its fuel consumption over the last few months. Yesterdays drop was just a knee jerk market reaction.
Did you also notice the lower right hand corner of the screen with the dow down close to 200 points while Bush was speaking?

[Nyland8]

Different meals for different palates.

Bush's quotes are concocted for consumption by the underclass. The knee-jerk, self-described "conservatives" who don't know what they're being fed. Dittoheads and others who get their "news" from the MSM.

Conversely, Bernanke's quotes are directed at the investor and ruling classes.

It's not a difference of opinion. They are meals prepared for different tastes. This is one of the reasons that Noam Chomsky so often quotes the Wall Street Journal.

There is "news", which is half-baked for greater public consumption. And then there is "News", which is properly cooked to keep the investor class well fed.

And then there is "NEWS" - which is generally far too rich for most people. Sometimes morsels of “NEWS” can be found right on these pages, although the moderators try to protect our delicate digestive tracts from too much of it. If you’ve never or rarely consummed “NEWS” (which often requires a great deal of chewing) it might leads to gas.

Or diarrhea.

8

[zanngra]

Every time George (don't confuse me with the facts) Bush speaks, it helps Obama. This news conference just reinforced Phil Gramm's theme. All their rich friends are doin just fine so what's the problem. I am counting the days til George Bush jumps on the short bus and rides out of town.

[LaFeminazi]

Funny thing was, all this was predicted two years ago.

What did they do?

Stuck their heads in the sand of course and prayed they were out of office before the s**t hit the fan.

Then blame the Dem's.

Dammit.

[MaeScott]

Like that billboard in TN with the picutre of the Twin Towers on 9/11 and thwe caption "don't vote for a Democrat" when 9/11 happened on Booshes watch, Condi had the warning that an attack was imminent. Yep, blame the Dems.

[LaFeminazi]

Vote repug!

Always too late for the ball

let alone on it.

[RosyBaldwin]

We really shouldn't be too surprised by Bush's out-of-touch mindset, after all when our nation faced its darkest hour that morning on September 11, 2001 our President sat reading a childrens' book about a billy goat (or was it a nanny goat??) for crucial minutes in an elementary school while thousands were dying.

This is nothing new...*sig­h.

[LaFeminazi]

The good news is that the world economy has held up surprisingly well. The bad news is that the risks remain squarely on the downside. It will take some luck and much judgment to pass through the storms unscathed. It is time to take a break from the gloom. That is what I will now do. I will be back at the end of August.
http://www.ft.com/cms/s/0/2cc4291c-52a2-11dd-9ba7-000077b07658.html

[Nyland8]

Adieu.

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[tomhuggan]

You should use quotation marks, even if you speak them as your own. The one really important quote from Martin, that is brought up for the first time in the media, that is so obvious that it should be everywhere. It is that the producers of oil are leaving the oil in the ground, anticipating that the price will be higher in the near future. There's no sense in bringing it up unless you have a dire need for cash.

[LaFeminazi]

Actually I linked it.

Thanks.

[bodo]

The bad news is that there is no good news.

[alaintex]

Isn’t the US and everyone who lives here blessed?

We have had the strongest economy in the world for almost all of our lifetimes, and when a slight downturn occurs, we can still pi$$, moan and complain about how bad it is. Even though it’s still 4 times better than the next best country. I'm so thankful to be alive in this time and place.

God Bless America.

[LaFeminazi]

Good satire.

[biwee]

Check out the standard of living ratings of the US compared with western European countries.
Norway, for example, has a better standard of living than the US.

[alaintex]

Good for Norway, we stand with them at the top of the world.

It would be hard to lead every country in every catagory. But all things considered, I'm glad I'm an American living in the USA in the current day and age.

[Nyland8]

You had me on board until the last line.

8

[LaFeminazi]

Lost me at 'isn't'

[LaFeminazi]

Promising that the Fed would continue to view restoring the financial markets to health as “a top priority”, Mr Bernanke said policymakers believed that the risks to growth were “skewed to the downside”.

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In brief, the tax payer pays.

[Vurt]

lets skip the talk about recession, and face the bush depression