Is Bush A Stinking Drunk Again?

Never having been a drinker, I don't turn to, or think of turning to, alcohol in stressful times. In fact, the notion makes no sense to me at all, but, like I said, I was never a drinker. I'm thinkin' it would make more sense in trying times to have your wits about you. That's especially true for someone with ponderous responsibilities on his shoulders like... say the president of the United States at a time when his domestic and international policies are coming home to roost and putting millions of American families in grave jeopardy.

It speaks volumes about the character of George W. Bush that he's been hitting the bottle again. A few years ago Dr. Justin Frank, a Washington D.C. psychiatrist and author of Bush On The Couch: Inside The Mind Of The President warned everyone: "I do think that Bush is drinking again. Alcoholics who are not in any program, like the President, have a hard time when stress gets to be great... I think it's a concern that Bush disappears during times of stress. He spends so much time on his ranch. It's very frightening."

Now he's in Lima and he's been imbibing the traditional pisco sour at the Asia-Pacific Economic Cooperation forum. I called my friend Roland, a big fan of Peru and of pisco, to ask him if the stuff is strong. He suggested I listen to this tape of an inebriated Richard Nixon and said, "it's 20 times stronger than whatever he was drinking." It's like a power-packed margarita: Peruvian brandy with lemon juice, raw egg whites, some syrup and regional bitters-- and was invented by an American in Lima in the 1920s as a substitute for a whiskey sour. It has the same effect.

A few days ago Paul Krugman warned about the dangers of a power vacuum reminiscent of the time between FDR was elected in November 1932 and the times he was inaugurated in March 1933. "In 2008, as in 1932, a long era of Republican political dominance came to an end in the face of an economic and financial crisis that, in voters’ minds, both discredited the G.O.P.’s free-market ideology and undermined its claims of competence."

There is, however, another and more disturbing parallel between 2008 and 1932-- namely, the emergence of a power vacuum at the height of the crisis. The interregnum of 1932-1933, the long stretch between the election and the actual transfer of power, was disastrous for the U.S. economy, at least in part because the outgoing administration had no credibility, the incoming administration had no authority and the ideological chasm between the two sides was too great to allow concerted action. And the same thing is happening now.

...How much can go wrong in the two months before Mr. Obama takes the oath of office? The answer, unfortunately, is: a lot. Consider how much darker the economic picture has grown since the failure of Lehman Brothers, which took place just over two months ago. And the pace of deterioration seems to be accelerating.

Most obviously, we’re in the midst of the worst stock market crash since the Great Depression: the Standard & Poor’s 500-stock index has now fallen more than 50 percent from its peak. Other indicators are arguably even more disturbing: unemployment claims are surging, manufacturing production is plunging, interest rates on corporate bonds — which reflect investor fears of default-- are soaring, which will almost surely lead to a sharp fall in business spending. The prospects for the economy look much grimmer now than they did as little as a week or two ago.

What can Obama do? He announced his nomination of Tim Geithner and Wall Street reacted deliriously and this week he'll probably repeat that by announcing the rest of his economic team and by continuing to send soothing signals to the Market.

What can Bush do? Well, just delay the inevitable personal disintegration for a couple months wouldn't be too much to ask. Thomas Friedman, who stopped making any sense years ago, actually came up with a good idea today-- if one that no one will take seriously, being accustomed to only taking his bad ideas seriously. He suggests that Bush appoint Geithner Treasury secretary now, replacing Henry Paulson.

[W]e can’t afford two months of transition where the markets don’t know who is in charge or where we’re going. At the same time, Congress should remain in permanent session to pass any needed legislation.

This is the real “Code Red.” As one banker remarked to me: “We finally found the W.M.D.” They were buried in our own backyard-- subprime mortgages and all the derivatives attached to them.

Yet, it is obvious that President Bush can’t mobilize the tools to defuse them-- a massive stimulus program to improve infrastructure and create jobs, a broad-based homeowner initiative to limit foreclosures and stabilize housing prices, and therefore mortgage assets, more capital for bank balance sheets and, most importantly, a huge injection of optimism and confidence that we can and will pull out of this with a new economic team at the helm.

The last point is something only a new President Obama can inject. What ails us right now is as much a loss of confidence-- in our financial system and our leadership-- as anything else. I have no illusions that Obama’s arrival on the scene will be a magic wand, but it would help.

Right now there is something deeply dysfunctional, bordering on scandalously irresponsible, in the fractious way our political elite are behaving-- with business as usual in the most unusual economic moment of our lifetimes. They don’t seem to understand: Our financial system is imperiled.