President Bush Addresses the Economic Crisis
September 19, 2008 by Miranda Marquit
Filed under Finance
I’m actually writing this as President Bush talks, so here are some of my random thoughts on Bush’s comments on the economic crisis.
“Pivotal moment.”
Really? What will we do? Will we change the way we do things? Perhaps abandon an economy that is so based on debt and consumption?
“Free enterprise” and “only when necessary”
Apparently there is no “free enterprise.” It’s all about socializing the risk associated with massive private profits and decisions. Decisions made mostly upon greed.
“Address the root cause”
No, no, no, no, no! The root cause is not the fall of the housing market. It’s the policies and the lending practices that led to the approval of people who could not afford mortgages. It includes the sort of things like credit derivatives that did not allow for transparency, and encouraged the sort of behavior that led to the housing market crash.
The root cause is, in fact, the policies and practices that have betrayed the people and created all sorts of problems.
“Vast majority assets purchased have good value over time”
Um, right. I hope so. Because I don’t know how long we’ll all be paying mortgages in this climate, thanks to inflation and recession and stagnant wages. And we’ll see if it gets paid back. But this means a big risk. And a big deficit.
“Dry up loans…risks cannot afford to take”
Oh yes, please. Because an economy based on “regular” Americans being debt has been working out so well. The last thing we need is more loans.
“Confidence”
I hear: Smoke and mirrors. We’re supposed to be buoyed up by confidence. And he’s doing a great job of trying to make us feel good. It is good that he’s trying to instill confidence. At the same time, though, “confidence” isn’t the same as solid solutions.
I do like the idea of insuring money market accounts. You know, for the rest of us savers — the ones who haven’t been making rash and risky decisions based on greed.
“Work with Democrats and Republicans alike”
We’ll see how that goes…How long before this becomes a wedge issue?
What did you think of President Bush’s speech? I’d love your comments.
While I agree with you for the most part, the President’s job is to get in front of average Americans and try to calm them down. FDR did it during the Depression and WW II. Eisenhower did it during Korea. Nixon did it (badly) during Vietnam. I watched the TODAY show yesterday when people were submitting questions to their “experts,” and it is clear that a lot of people are clueless – one asked if he should take a loss and sell his house now (this was a Baby Boomer!) Yikes! These people need platitudes right about now.
Thanks, Jean! As I said, I do like that he’s trying to instill confidence. And you’re right that we should avoid panic. But it would also be nice if there was more to this whole thing than “confidence.” Because everything that is being proposed is pretty much a band-aid, and doesn’t address the long-term problems. I was especially disheartened that the President seemed mostly concerned that ordinary Americans wouldn’t be able to get loans. It seems his motivation is to make sure we can all keep getting into debt — since that what the economy is based on right now.
The consumption economy model is flawed as evidenced by this mess. I’m going to keep reducing my debt and weather the storm out.
Thanks for weighing in, Laura! It sounds like you have a good plan. And, really, that’s about the most any of us can do: Reduce debt, live frugally and hope for the best.
I dunno… calming requires credibility. With the country so polarized, half the population might take it as a positive reassurance, the other half as a contrarian indicator. Either way, we are left with questions. With us nationalizing everything and the kitchen sink, is this the administration for 1) reducing the risk of recurrence 2) promoting the best interest of the greatest number of people? In any storm, you don’t want panic at the worst times, but you also hope for adequate infrastructure, and if necessary, competent reconstruction. Fingers crossed.
Excellent points, Sean!
I know that President Bush’s assurances don’t hold much weight with me…
I voted for George Bush, but I’ll be the first to admit his fiscal record has been appalling. I am a strict fiscal conservative, and for the first seven years of his presidency he never wet the ink on his veto pen. I’m not impressed by these tax-payer funded bailouts from the current administration, just as I was unimpressed with the so-called stimulus package. I just basically have a problem with the government spending public money to salvage private entities. Our leaders ought to go back and read the words of our fore-fathers.
Having said that, Congress must take some of the blame here, as must the American people who borrowed an ever-increasing amount of debt for things they simply could not afford. Even if they could afford the minimum payments, the added risk to their lives was not worth it. A rogue wave or two comes along and we were all tossed overboard.
I’m all for moving past finger-pointing and getting to real solutions, but part of recognizing the problem requires at least some self-reflection as a society to see that our years of over-consumption finally caught up with us. Then again, what kind of commentary would you expect from a “frugal dad?”
When things go wrong, it’s easy to place all the blame on the President. When things (ecomomy, jobs, etc.) are going good, the opposition takes the credit. We, the citizens, also have to take responsibility for our lives and our decisions. Did we, personally, make some poor decisions that contributed to a crisis?
MEA: You make a great point that we do need to be responisble for our own actions. I think some of the outrage right now comes from the fact that the government made it possible (legalized) the sort of credit derivatives that are at the root of this problem. Then other people speculated on them, and taxpayers (most of whom did not speculate on these risky investments) will have to foot the bill and will ultimately pay the price.
But you are right that we do need to look at ourselves as a society and fix some of the thinking and practices that contributed to the problem.
Thanks, Frugal Dad! (Sorry about this. After painstakingly using my mobile to type out a reply to your comment on Saturday from Blogworld, I found it didn’t work. The blog post I painstakingly typed on my mobile Saturday disappeared as well.)
At any rate, even though we disagree on some things (respectfully, of course!), I do agree with you about looking at society, ourselves and what the government has allowed. A healthy dose of introspection is needed. And we need to, as individuals and a country, and with the encouragement of our government, move away from a consumer-spending-funded-by-debt model of the economy.
Past is past. And everyone played a part in this crisis. It’s time to just move forward and make better decisions.