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

[SCG]

If anyone wants a history of how the government numbers have been cooked.

Read this: http://harpers.org/archive/2008/05/0082023

[LeSamourai]

Good read, SCG. Thanks.

[schoolmaster]

There is only one drum. Bush beats on one end and Bernanke the other. If it produces music, only they can enjoy it. Other countries must learn from us as to how to run a government.

[scottarino]

Considering how wrong Bush has been on EVERYTHING, or he's just a liar, I can imagine the economy in real bad shape.

[archerofloaf]

Isn't high productivity another way of saying less money for more work?

[econdr]

yes, and that's the entire goal of inflation in times of recession. it allows companies to eek out a bigger profit at the expense of their employees, essentially.

[layman]

High productivity is because big corp lobbyist lobbyed this administration to have more visa issued to foreigners from countries like India to have cheap labors readily available for the big corps of America, leaving qualified Americans unemployed and hang out to dry. That's Bushco's
compassionate country at work.

[VolvoBirkenstock]

My how times have changed. We have become the "cheap" foreign labor source:

Volkswagen selects Tennessee for US auto plant

"Volkswagen has said the surging euro pushed along plans for a production facility in the United States. The euro's rise has made goods exported from Germany more expensive in the United States.

"David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich., said the strong euro dictated Volkswagen's timing. He said making a mid-priced vehicle in Europe "can't be viable."

"They had to come here," Cole said. "It's a very competitive market. If you are going to do anything with that market you have to be here."
http://news.yahoo.com/s/ap/20080715/ap_on_bi_ge/volkswagen_us

[scottarino]

This is how the unfettered free market works. Your best hope in life is hope to not be living and working in a "cheap labor source" country. Or you'll be behind the eight-ball your whole life. KInd of sounds like that's where we basically are this generation in the U.S. Yay.

[Nochnoi]

I thought for sure they were going to go with the second choice... oh well.... I guess in the end it means more jobs which is always a great thing these days..... Stooopid GM is tanking so bad, so many more people are losing their jobs that Michigan is going to be mistaken for a red state due to the hemorrhaging.....

[AdLib]

But McCaln and Gramm say it's just mental, it can't be anyone else's fault but the victims of this economy who are to blame for it, right?

[AdLib]

MichiganJFrog: A short quiz - Guess which quotes below are from BOOsh and which are_Cartman:

1a. "Respect My Authoritay!"

1b. "I'm The Decider!"
===================

2a. "Maury, I am out of control. Yeah, I use_drugs. I can do what I waunt, _biatch! Yeah, I have_sex_ and I don't use protection! It's my hot_body; I'll do what I waunt! I don't go to school and I_kiII people! What-evah! I'll do what I waunt!"

2b. "I'll be long gone before some smart person ever figures out what happened inside this_Oval Office."
===================

3a. "It isn't pollution that's harming_the environment. It's the impurities in our air and water that are doing it."

3b. "I hate_hippies! I mean, the way they always talk about 'protectin' the earth' and then drive around in cars that get poor gas mileage and wear those stupid_bracelets - I_hate 'em! I wanna_kick 'em in the_nuts!"

How'd you do?

[VolvoBirkenstock]

"Bushie Has Two Economies"

Sounds like a book the fundies will protest being in the public library.

[Nochnoi]

Are they really going to bother putting books in the library? Just one huge fiction section.... oh and colouring books......

[DocHolliday]

Books on tape.

Like: My Pet Goat... a book still too complex in it's intricacies for the vast majority of the right-wingers to comprehend - much less read.

[dobberdoss]

Cry us a river America, the world IS listening and in the famous old words of one of your `great` corporations we are also ``lov`n it!``

hehehe

[HumeSkeptic]

F*ck you. :-)

[AdLib]

Mo_ron, it's not a global economy, is it? If the US economy is in recession, the rest of the world just keeps getting the same flow of profits, right?

Is there an IQ test to be a hater_and if so, do you have to score no higher than double digits to qualify?

[USBrit]

The US is a declining factor in the world economy, which is a natural result of the decline of the US. Will the US slowing hurt the world economy? Of course, but not as badly as it would have a few decades ago. The EU economy as a whole is bigger than the US, the Asian economies are still moving along quite well, the world simply is not as dependent on the US as previously. Even the new Russian president was bold enough to tell Hank Paulson that the US can look forward to having diminished influence on the world stage - the net result of 8 years of complete insanity and the final result of the destructive influence of the Milton Friedman economic policies together with the idiocy of the Laughter curve (and yes, that is not the way it is spelled, but every time I hear the premise behind it it causes me to laugh...)

[KQuarksSuperKollider]

The truth is that Rethuglicans have no experts in politics on the economy or anything because it does not make enough money.

[HumeSkeptic]

Just thought of something:

Al Franken + Sam Stein = Frankenstein

.

[AdLib]

"Alive! It's alive!"

Al Franken may be disappointed that Jesse Ventura isn't running for Senate in Minnesota. But the comedian-turned-politician gets some good news in a new Rasmussen poll: he's edging out Sen. Norm Coleman 44% to 42%.

http://www.huffingtonpost.com/2008/07/15/al-franken-edges-out-sen_n_112832.html

[jbcowan]

Sounds like a Law Firm :)

[Nochnoi]

Hehehehe..........

[Marichu]

GWB could be having difficulty accepting the flawed and failed legacy of his presidency. A possible way of overcoming this sense of abject failure may be through denial. Creating a rosier outcome to compensate for the hard cold facts could be a release valve where reality won't intrude and overwhelm him.
This probably allows him to go to bed at night and wake up in the morning to tell us the world is doing ok.

[kay]

Well, it's an election year, and the President is a rabid, complete, political partisan, so came out waved the pom poms.

Just my opinion, but stupid move. Because it's going to get worse before it gets better, and he'll have zero credibility left, and won't be able to reassure anyone of anything when it does, and then all hell will break lose.

Maybe they can call on Laura, later. People still like her.

[VolvoBirkenstock]

Only because she rarely says anything.

[Nochnoi]

What more can one expect from a Stepford Wife......

[SCG]

Kay, I think it helps the cause for him to be out there, what better reminder of why to vote than W?

Can you imagine how it went over in living rooms around America, that our President thinks we're not in recession? As spending has been contracting for months and job loss is growing, and home values are falling?

[mollysgran]

Let me see. Who am I going to believe. The guy who has lied to me for nearly 8 years, or the guy who was lying about the economy before he quit at the Fed and was replaced by the guy who lies about the economy??? That is a tough one.

[VolvoBirkenstock]

Perhaps rollingdivision will be by shortly and plagiarize an answer to your question.

[rudyacuna]

The American public and the idiot media deserve this guy. His IQ is below average in all probability the dumbest president that we have ever had. If he were a black or a Latino he would not have made it to dogcatcher. The tragedy is that his father knew he was a loser and kept his mouth shut. This is from a man who supposedly loved his country.

[CuriousPerson]

From my observation, Republicans don't love their country, they only love what their country can do for them.

[JRandomPoster]

If you define his country as his philosophical and economic peers, then I would say that he deeply loves his country. Of course, the rest of us aren't quite human, not quite real to him.

/Sarcasm Off

With that said, I think it is dangerous to underestimate Bu$hCo. Despite how moronic the sh rub may look in public, these folks have managed to manipulate the nation for well neigh a decade.

[jteschke]

Convincing evidence shows that the statistical measure of inflation used by the govt is inaccurate to the point that they've understated inflation by at least three per cent a year during the entire bush regime era. This would mean we've been in a depression lasting the entire 21st century up to now, if you correctly include the year 2000 in the 20th century, mathematically an accurate position. It's no wonder that over 80% of the American populace, despite the balderdash peddled by the main stream media, knows that we're heading in the wrong direction.

[BrettnCalgary]

http://www.shadowstats.com/alternate_data

This is a useful site.

[SCG]

Numbers racket: Why the economy is worse than we know

By Kevin P. Phillips Harper's magazine May 2008

http://harpers.org/archive/2008/05/0082023