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

[maxdenn]

The strong impression here is that the GOP presidential contender is nothing more and nothing less than a neo-con, and will continue the obviously failed economic policies of the current prez.

[cheshirecat831]

The only ones to blame, and they are the ones that will suffer financial ruin, are the great Amerikan electorate. Those that bother to vote that is. Twice these mental giants voted this guy in (yes, the first time was tricky but ultimately he had it.) So the finger of every unhappy person who voted for this fookin eejit has to be pointed at themselves. Time for the US if A to have a reality check...and it ain't pretty.

http://sfbaysailingpix.com/pez2008p1.htm

[Nochnoi]

No.... he didn't win the first time.... not legitimately.... unless you think cheating is a legitimate thing to do....

[borderorder]

What republican wall street type doesn't? Rhetorical question.

[ChiGuy]

Sadly, many people think that they've fulfilled their patriotic duty by watching 30 minutes (if that) of network news, and showing up at the polls.

[JRandomPoster]

Hmmm.... it seems to me that Walter Cronkite must be spinning in his grave so fast at this point as to be generating enough heat to melt steel. Perhaps we can make FauxNews a renewable energy source by putting a heat tap above Cronkite's grave?

[glaze]

Astounding... he just keeps getting stupider and stupider...

[pennst1143]

apparently nobody here is familiar with the phrase "self-fulfilling prophecy" which is especially relevant to the finance and banking industries, let alone the broader economy . . . if the president of this country said the financial system was unsound or the economy was going to seriously recede, people would panic, make runs on banks, and many would collapse basically overnight. . . and besides, if he dwelled exclusively on the negatives you all would have nothing new to talk about

[nonconformist2]

It's "all in our heads", it's a "mental recession", "stop whining".....................Nope, not buying it.

[pennst1143]

i never said calming, what i did say was dont needlessly fuel the fire

[gladys46]

So you think the "president" was successful in calming any damn body!? Please, if anything, Americans are more anxious!

[Totto]

FYI Gladys, T. Boone Pickens contributed two million dollars to Swift Boat Veterans For Truth in 2004 (SourceWatch) and who are they helping in the current campaign?

[JRandomPoster]

Actually, despite my disgust at phrases such as "the economy problems are just all in your head", there is a grain of truth to what you are saying.

The whole system is an illusion that we have all agreed to buy into. There is no real value in a dollar, a yen, an Euro. It has the value that we all agree it has.

With this said, those who can have bent the rules of this shared illusion to the point where most people no longer believe in it so much.

[danoj]

Whaat would you have the Pres do say everything sucks. No Pres is going to do that even if things do suck. What's killing everyone right now is fuel prices. We need to tap our own recourses in the short term, kill the speculation, and work on alternative energy as a long term fix. Pretty much none of this is happening though and probably won't. So expect more pain.

[JRandomPoster]

How about using less resources? Not giving work truck tax rebates for Cadillac Escalades and Dodge Durangos. Putting money into the public transit systems - buses even. If you consider that the guy who made your Subway sandwich probably spent a quarter of his take home salary to get to work, helped reduce your own gas millage by clogging up the freeway, it just makes sense.

What does not make sense is trying to increase production of finite resources while at the same time doing nothing to seriously encourage people to reduce consumption.

[jbcowan]

Expect more pain ?

At least 5 more months (Bush's term mercifully ends) fer sure !

[enlighteninglad]

Truely anyone that thinks the oil companies are going to allow prices to be lowered at all, much less dramatically, is naive. It took how much to get this to happen, they aren't going to give it up, at least not easily, which is the main reason they want McCain in the White House. With the precedent set for secrecy of the utmost, everything could remain behind closed doors and this will just continue. No, nothing will be done in the short term till Bush is out of office and the democrats take back control of both houses and the executive branch. Really, think about it. If anything were done about the speculators and the price dropped dramatically then that would validate the idea that the price is artificial and it would be square on the republicans shoulders since the Enron loophole was put in place to allow the manipulation of the market. It also allows "them" to control the entire energy industry so when alternative fuels become prominent, those that control oil now will control whatever we end up using next. Its all about money and control. If we don't get some people with integrity and backbone in our government, and soon, this country is going to go the way of Rome, but a lot sooner.

[pennst1143]

the economy is built on perceptions and expectations . . . e.g. if people think prices or costs will rise in the future, they will save more and spend less now, regardless of whether the present fundamentals of the economy would actually permit prices or costs to be stable in the future. same with banks. banks need capital (deposits, CDs, etc) coming in the front end to loan out the back end to make money . . . if people THINK a bank is gonna fail and start pulling their money out / not depositing it, what could have been a mistaken perception then turns into a reality

i still havent heard what good the president jumping up and down yelling fire would do for the economy

[gladys46]

He can stay his butt butt in that Oval Office until he gets it right ... that's what! Then he can take a flying leap ...! People have lost a whole lot of hard-earned $$$ ... markets & 401K's, pensions!! Because he's not yelling fire does not mean that heat & smoke is not fully raging!

What he is doing is telling us it's rain not piss!

[gotalife]

The solution is to legalize drugs and tax them.

You are going to need them because this is all in your heads.

Stop whining and start smoking.

[VolvoBirkenstock]

Still upset over your candidate's failure to get the nomination?

Speaking of WHINING, a quick perusal of your profile shows that whining is all you do, PUMA.

[gotalife]

8 supers have switched so far.

I started a movement:

http://tpmcafe.talkingpointsmemo.com/talk/2008/07/lets-flip-flop-on-obama-and-ru.php

[nonconformist2]

Should you be here? Who's watching the goats?

[flydoghead]

now it all makes sense gottabong

now get back to the loading dock !!

[nonconformist2]

B-ush's master plan: Destory the economy. Leave office. Expect the democrat to clean it up. While the democrat is cleaning it up, blame the democrat for destroying the economy.

Almost as "brillant" as his Iraq master plan: Invade an oil laden country with zero terrorists. In response to our invasion, terrorism increases 1000%. Claim that we invaded to fight the terrorists that are now there (even though they wouldn't be there but for the invasion).

[JRandomPoster]

Hey, now. The Republicans are the party of fiscal responsibility. There is no question of that. The question that folks should be asking, though, is: "Responsible to whom?"

[nonconformist2]

Good Point.

[jbcowan]

Responsible to whom ?

HALIBURTON !!!

[focher]

Why does the media insist on giving this idiot any coverage? He clearly is a mental defect, has no connect with reality, and the only reason his diatribe should be repeated is in the context of being mocked. I'm really not trying to be obnoxious. He really does have nothing but stupid stuff to say and it is really irritating that he gets any respect.

[gladys46]

I think the whole of America should come down on N. Palosi like a ton of boulders! She should have brought articles of impeachment against Bu$h! The Nation has been harmed by this man's presidency!

[Coyote2]

I think the people of America should have come down on the White House gates like a ton of boulders. 10,000 folks daily at the gates should have brought articles of impeachment against Bu$h! The Nation has been harmed not only by this man's presidency, but by the failure of the people of America to do anything!

[nonconformist2]

After you storm the white house, and exercise your right to protest, I have only one question?

What sort of care package do you want me to bring you during your extended stay at Gitmo?

; - 0

[gladys46]

Absolutely!

[nonconformist2]

The problem is that if we impeach B-ush now, then all the nation's focus and energy will be on this proceeding and not the campaign. And the American sheeple will start to feel "sorry" for poor wittle bushie. This will only serve to help McLame and hurt BHO. I want to win in November. This is more important to getting back at President Forrest Gump. I can't live with 4 to 8 years of McLame. Not worth the risk.

[All57States]

Please tell me you don't have any kids.

[VolvoBirkenstock]

The nation should come down on the Republicans who have not raised the issue of removing B ush.

The Republicans in the Senate whose votes are needed to convict and remove from office.

[markie1111]

gramma pelosi has been around the block a few times. she knows that impeachment would serve no real purpose, however gratifying... we are going to take take control of this country back from the corporations, come hell or high water.

[gladys46]

I said she "should" have! I reject her reasoning, when she hit the House floor as speaker that is when impeachment should have been within that 100 day thingie!!

Anyway ... she has taken me to my ultimate sense of pissivity ... ah, & shrub is totally insulting!

[All57States]

Nancy Pelsoi promised to lower our gas prices. I would like her to keep that promise before going on to impeaching the President.

[richardgordon]

Let's see, Bush lied about the War in Iraq, Lied about the Valerie Plame leak, Lied about firing the appointed attorneys for political reasons, Lied about global warming, and is now lying about the state of the ecconomy. I wonder if the public can see a pattern here?

[nonconformist2]

Well, at least he's consistent..................at lying.

[editor]

It just depends on whether you live in Reality World; or bush FantasyLand....

[rwe]

Pres Bush says DRILL HERE DRILL NOW .OIL drops $9.00...

[JRandomPoster]

See? It's like he said - all you need to do is change the psychology.

Same thing with the economy - it's all in our heads.

(And I'm sure the sick-to-my stomach feeling is really in my head, too....)

[gladys46]

Nope, nope ... futures heard reports of Iranian envoy to talk with American diplomat! No immediate fear of Straits being blockaded ... maybe!

[VolvoBirkenstock]

Successful oilman T. Boone Pickens says we can't drill our way out of this problem.
http://www.youtube.com/watch?v=R2bOug1d20c

YOU say we can.

Whom to believe?

[nonconformist2]

Never trust a screen name with no vowels, I always say! ; - )

[pennst1143]

most every economist says targeting so-called "speculators" in oil markets will do nothing and could possibly exacerbate prices. . .doesnt stop any of you from gobbling up what you want to hear though

[TAC]

"Pres Bush says DRILL HERE DRILL NOW .OIL drops $9.00..."

Wasn't he the oilman that couldn't find oil in Texas?

[SaviourMachine]

Woohoo,I've only gone to p.e.n.d.i.n.g p.u.r.g.a.t.o.r.y twice today!

Let's see if I can keep that up.

I will know make a sacrifice to the m0dz.

[kingcityguru]

I choose to believe in the greatness of America and Americans. Why are Democrats such pessimistic losers?

[TAC]

"I choose to believe in the greatness of America and Americans."

Do you also believe in Santa Claus, Easter Bunny, Tooth Fairy and Jeebus?

[SaviourMachine]

First ,wth does that have to do with my comment?

Second,Dems aren't pessimistic losers.They're just angry that Bu$h Inc. has been trashing the country,the constitution and Americans.

If you're not angry or worried about the state of things you're obviously not paying attention and or don't give a hoot.

Or you like being lied to.Perhaps all three.

[Nochnoi]

The greatness of America.... really..... what have we been great at lately?

[nonconformist2]

Well, Dorothy, you go ahead and click together your ruby slippers.

The rest of us? We will demand a leader who knows his a$$ from a hole in the wall.

[borderorder]

America - the greatest country on the face of earth given to us by Gawd. S ean
H umpidee.

[Coyote2]

beat u. only one where I forgot to do B u sh

[markie1111]

listening to the audio of bushdick's statement, loved the fact that he stumbled when trying to say "american". speaks volumes.

[VolvoBirkenstock]

Add it to the list of words he has trouble pronouncing. The British are ecstatic. No matter who wins, they are spared the cost of an interpreter when the U.S. President meets with The Queen or P.M.

[markie1111]

he's an easswip for sure.

[AllenD]

In some ways, I kind of feel for Helicopter Ben Bernanke. He is in kind of the same situation that Obama will be in, given the thankless task of cleaning up a gigantic mess left by an incompetent predecessor. If he cuts rates (which he did), the dollar tanks and energy prices go through the roof. If he raises rates, the economy tanks even worse.

[ChiGuy]

Hmmmm.......Let's see......One of them is in a position requiring a high degree of intelligence, while the other has proven that even a smattering of intelligence isn't a prerequisite for the job he holds.

Who to believe, who to believe.