THE BUSH RECESSION WILL BE BOTH DEEP AND LONG-- AND TIE THE HANDS OF THE NEXT PRESIDENT FOR YEARS

Neither of these two will be dealing with the consequences of the Bush Recession

That's not just my opinion. It's also the prediction of Princeton economist and NY Times columnist Paul Krugman. Bernanke has decided to take on some mortgage risk, as much as $400 billion worth. Krugman doesn't think that will stop the economy's slide into a really bad recession.

I’m more concerned that despite the extraordinary scale of Mr. Bernanke’s action-- to my knowledge, no advanced-country’s central bank has ever exposed itself to this much market risk-- the Fed still won’t manage to get a grip on the economy. You see, $400 billion sounds like a lot, but it’s still small compared with the problem.

Indeed, early returns from the credit markets have been disappointing. Indicators of financial stress like the “TED spread” (don’t ask) are a little better than they were before the Fed’s announcement-- but not much, and things have by no means returned to normal.

What if this initiative fails? I’m sure that Mr. Bernanke and his colleagues are frantically considering other actions that they can take, but there’s only so much the Fed-- whose resources are limited, and whose mandate doesn’t extend to rescuing the whole financial system-- can do when faced with what looks increasingly like one of history’s great financial crises.

The next steps will be up to the politicians.

I used to think that the major issues facing the next president would be how to get out of Iraq and what to do about health care. At this point, however, I suspect that the biggest problem for the next administration will be figuring out which parts of the financial system to bail out, how to pay the cleanup bills and how to explain what it’s doing to an angry public.

It couldn't have worked out any better for the Bush Regime and an assortment of anti-government Republicans-- and for anyone, anywhere, who wanted to bring America down-- had they planned it themselves. A news report in this morning's Times offers the back-up to Krugman's grim picture.

Almost everything seems to be going wrong for the American economy at once. People are buying less, but most things are costing more. Mortgage rates are rising, the dollar is falling and prices of key commodities like oil are leaping from one record high to the next.

On Thursday, the dollar plumbed new lows against the Japanese yen and several other major currencies; the price of an ounce of gold jumped above $1,000 for the first time; and lenders raised home loan rates once again. Government figures showed retail sales fell in February as consumers cut back on cars, furniture and electronics.

...A toxic blend of economic and financial developments is testing policy makers and lawmakers who are struggling to contain the slump brought on by the collapse of the mortgage market, a downturn that now looks sure to push the economy into a recession. Though current conditions are a far cry from the 1970s, resurgent inflation is raising the threat of stagflation-- a condition in which unemployment and the price of goods and services both rise.

And what is the CEO President-- the Harvard MBA-- doing? Probably wondering if the 14% approval rating he has in terms of his job approval on economic issue has bottomed out or if it can go even lower? Has there ever been a president with an approval rating in the single digits? Has one ever put forward an agenda and policies that deserved that judgment more than Bush? His entire life of one dismal failure after another predicted what American voters were doing to themselves when they complacently acquiesced to his judicial coup in 2000. And to top it off, he was chosen a political heir that, if anything, is even less suitable for the presidency-- by nature, character and temperament, than he has been! Bush tried making believe he knew something about economics beyond how many nickel bags he could get out of an ounce. This one admits he's clueless about economics and just wants to start bombing Iran and plans on leaving the damn economy to hired MBAs; maybe he can make Bush his Special Advisor for the Economy.

The Regime announced some anemic plans for dealing with future-- though not the current-- set of economic problems and crises. It revolves around self regulation for private industry-- i.e., another Republican license for greed-obsessed, unaccountable rich people to rape and pillage society. The Bush Regime plan-- if you could even call it that-- "relies on the same market participants-- from mortgage brokers to credit-rating agencies and Wall Street firms-- that government officials and other experts blame for the current crisis... Democratic lawmakers described the proposal as light and late, while industry representatives [licking their chops] welcomed the initiative."


UPDATE: BUSH-McCAIN ECONOMICS: PRIVATIZE THE PROFITS AND NATIONALIZE THE LOSSES

While Bush tap-danced this morning about why the federal government has to let homeowners lose their homes in a downturn caused by inept and anti-social, greed-driven ideological policies, his regime was bailing out one of the culprits, Bear Stearns. Humane and affordable medical care in Republispeak is "socialized medicine." Giving inept, greedy, selfish and corrupt bankers billions of dollars in taxpayer money to cover up their incompetence and malfeasance is... their version of sound economic policy.