Friday
Nov142008
Newsflash: That Bush Speech for Economic Salvation
Friday, November 14, 2008 at 8:14
Non-Event of the Day
The President, who had to give a boiler-plate speech at the UN yesterday on religious belief and common values (which, forgive me, still doesn't square with Iraq 2003), then took on his important task. At the Manhattan Institute, he gave a keep-the-faith, flight-from-reality speech:
People say, are you confident about our future? And the answer is, absolutely. And it's easy to be confident when you're a city like New York City. After all, there's an unbelievable spirit in this city.
Bush's mission was to explain to the true believers --- not the religious one, the free-market ones --- that, after this weekend's global economic summit got through its first four tasks (like "understanding the causes of the global crisis"), it would get to the most important duty:
"reaffirming our conviction that free market principles offer the surest path to lasting prosperity"
That, of course, is not an action plan. It's a slogan, like the mantra from the Bush Administration's key global document --- the 2002 National Security Strategy --- of "freedom, free markets, and free trade".
Bush, however, had to cover his possibly-not-so-free market backside, having pushed for $700 billion of Government money to prop up the financial and banking sectors as well as the nationalisation of America's largest mortgage brokers. So he murmured, "I'm a market-oriented guy, but not when I'm faced with the prospect of a global meltdown," and then said...
Well, nothing of substance, really. Regulation of credit default swaps, financial co-operation, and other tinkering phrases. Filler to get to this, the opener for the second half of the speech:
While reforms in the financial sector are essential, the long-term solution to today's problems is sustained economic growth. And the surest path to that growth is free markets and free people.
Well, George, you can put the faith all you want but "sustained economic growth" isn't exactly the Number One Prospect right now. Recession is, and any speech of meaning --- rather than ideological flutterings --- would recognise the immediate dilemma for the US Government.
Paul Krugman, who doesn't hold elective office and thus doesn't owe that office to activists in places like the Manhattan Institute, grabbed hold of Dilemma Horns this morning:
We are already, however, well into the realm of what I call depression economics. By that I mean a state of affairs like that of the 1930s in which the usual tools of economic policy — above all, the Federal Reserve’s ability to pump up the economy by cutting interest rates — have lost all traction.
Krugman then gets to the heart of the matter and thus his recommendation:
All indications are that the new administration will offer a major stimulus package. My own back-of-the-envelope calculations say that the package should be huge, on the order of $600 billion.
It's a suggestion that would have Bush's speech into a real event, especially if Krugman had put the down-side half of his proposal: how do you finance that $600 billion when the Federal Government is on the verge of a $1 trillion deficit in 2009?
Instead, here's your Presidential economic reassurance:
We saw [America's] resilience after September the 11th, 2001, when our nation recovered from a brutal attack.
Of course, only the worst-taste blogger would extrapolate from this: America's economic salvation lies in another Al Qa'eda spectacular.
The President, who had to give a boiler-plate speech at the UN yesterday on religious belief and common values (which, forgive me, still doesn't square with Iraq 2003), then took on his important task. At the Manhattan Institute, he gave a keep-the-faith, flight-from-reality speech:
People say, are you confident about our future? And the answer is, absolutely. And it's easy to be confident when you're a city like New York City. After all, there's an unbelievable spirit in this city.
Bush's mission was to explain to the true believers --- not the religious one, the free-market ones --- that, after this weekend's global economic summit got through its first four tasks (like "understanding the causes of the global crisis"), it would get to the most important duty:
"reaffirming our conviction that free market principles offer the surest path to lasting prosperity"
That, of course, is not an action plan. It's a slogan, like the mantra from the Bush Administration's key global document --- the 2002 National Security Strategy --- of "freedom, free markets, and free trade".
Bush, however, had to cover his possibly-not-so-free market backside, having pushed for $700 billion of Government money to prop up the financial and banking sectors as well as the nationalisation of America's largest mortgage brokers. So he murmured, "I'm a market-oriented guy, but not when I'm faced with the prospect of a global meltdown," and then said...
Well, nothing of substance, really. Regulation of credit default swaps, financial co-operation, and other tinkering phrases. Filler to get to this, the opener for the second half of the speech:
While reforms in the financial sector are essential, the long-term solution to today's problems is sustained economic growth. And the surest path to that growth is free markets and free people.
Well, George, you can put the faith all you want but "sustained economic growth" isn't exactly the Number One Prospect right now. Recession is, and any speech of meaning --- rather than ideological flutterings --- would recognise the immediate dilemma for the US Government.
Paul Krugman, who doesn't hold elective office and thus doesn't owe that office to activists in places like the Manhattan Institute, grabbed hold of Dilemma Horns this morning:
We are already, however, well into the realm of what I call depression economics. By that I mean a state of affairs like that of the 1930s in which the usual tools of economic policy — above all, the Federal Reserve’s ability to pump up the economy by cutting interest rates — have lost all traction.
Krugman then gets to the heart of the matter and thus his recommendation:
All indications are that the new administration will offer a major stimulus package. My own back-of-the-envelope calculations say that the package should be huge, on the order of $600 billion.
It's a suggestion that would have Bush's speech into a real event, especially if Krugman had put the down-side half of his proposal: how do you finance that $600 billion when the Federal Government is on the verge of a $1 trillion deficit in 2009?
Instead, here's your Presidential economic reassurance:
We saw [America's] resilience after September the 11th, 2001, when our nation recovered from a brutal attack.
Of course, only the worst-taste blogger would extrapolate from this: America's economic salvation lies in another Al Qa'eda spectacular.
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