George W. Hoover

BocaGuy: A friend told me days after the Supreme Court voted 5-4 in favor of George Bush to give him the presidency, that George Bush would be the worst president in history. Michael your were a prophet.


Faiz Shakir, Amanda Terkel, Satyam Khanna, Matt Corley, Ali Frick, and Benjamin Armbruster
The Progress Report
Center for American Progress Action Fund
March 17, 2008

In a recent Wall Street Journal survey of the nation's top economists, 70 percent said the economy is in a recession and half said that "this year could be worse than the 2001 and 1990-91 downturns." "The evidence is now beyond a reasonable doubt," said one Wells Fargo & Co. senior economist. The Commerce Department also said last week that retail sales -- which account for more than 70 percent of U.S. economic activity -- fell 0.6 percent in February. Last month also saw the national unemployment rate increase as the Labor Department announced that the nation had lost 63,000 jobs -- the second consecutive monthly job decline. While the American public is in line with economists on the realities of the economy, President Bush has only recognized a "slowdown." Bush recently acknowledged that the "root cause of the economic slowdown has been the downturn in the housing market." But in a speech last week, Bush echoed President Herbert Hoover's sentiments regarding government intervention into a struggling economy, saying he "strongly disagree[s]" with "massive government intervention in the housing market." Bush said in his Saturday radio address: "The market now is in the process of correcting itself, and delaying that correction would only prolong the problem."

MORE BAD NEWS FOR BUSH: Beyond job losses, a decrease in retail sales, and the housing market crisis, a Center for American Progress (CAP) economic outlook shows that wages remain flat, family debt has hit record highs, fewer people have health insurance, and an increasing number are paying more for basics. In addition to housing woes, Federal Reserve Chairman Ben Bernanke said last month that the nation's credit crunch is also fueling the economy's downturn. Additionally, government spending is in the red. The Treasury Department announced last week that "the U.S. federal government ran a monthly budget deficit of $175.56 billion in February, a record for any month and 46% bigger than the deficit of $119.99 billion in February 2007." Last week, Sen. Sheldon Whitehouse (D-RI) illustrated that the federal debt incurred during Bush's presidency has reached $7.7 trillion. The value of the dollar is also in free fall, plunging below the 100 yen level last week for the first time in 12 years and "hitting a new low against the euro" today. Iraq war costs are reaching astronomical proportions, with projections ranging anywhere from $10-12 billion per month. The war has also helped oil prices skyrocket -- prices per barrel have recently reached record highs. Naturally, Bush has passed the buck. When asked during a recent interview about the rising oil prices, Bush deferred to "experts," saying: "I’m just a simple president."

BUSH'S QUICK AND EASY FIX: Regarding the housing and credit crises, the federal government has turned to a quick fix. "Hoping to avoid a systemic meltdown in financial markets," the Federal Reserve announced last night that it approved a $30 billion credit line to help JPMorgan Chase acquire one of the largest firms on Wall Street, Bear Stearns Cos., "which had been teetering near collapse because of its deepening losses in the mortgage market." The fire sale cost JPMorgan $2 per share, or "less than one-tenth the firm's market price" last Friday. The Fed coupled its "highly unusual maneuver" with a "new lending program [that] would make money available to the 20 large investment banks that serve as 'primary dealers' and trade Treasury securities directly with the Fed." However, experts are skeptical of the Fed's move, seeing that its recent plan to lend Wall Street $200 billion in exchange for mortgage-backed securities "failed to soothe investors and lenders, who are worried about the true value and default risk of many debt securities or are hoarding cash to meet their own needs."

PROGRESSIVE SOLUTIONS: Reacting to the Fed's announcement, President Clinton's former Treasury Secretary Lawrence Summers said "emergency provision of loans is necessary but not sufficient." The current economic situation needs progressive solutions. Andrew Jakabovics, CAP's Associate Director of the Economic Mobility Program, recently noted that "too many U.S. homeowners facing foreclosure and too many of their neighbors potentially lining up behind them." CAP's Great American Dream Neighborhood Stabilization, or GARDNS proposal "would provide $4 billion to buy up real-estate owned by banks and put deserving families in those homes" which would "cope with the foreclosure crisis and all its cascading ramifications for world financial markets and the U.S. economy." Addressing the other root cause of the nation's poor economy -- the credit crisis -- another CAP plan calls for a a credit card safety rating system to "give consumers better information about their credit cards and thus help them make better decisions." As more Americans struggle with paying for their everyday expenses in the midst of an economic downturn, such a system would lead to a better understanding about the ways the access credit. This would not preclude Congress from mandating "a higher level of fairness in credit card terms."

www.americanprogressaction.org