The Worst Economic Slump in 75 Years?
According to this Bloomberg article, Sen. Christopher Dodd has described the current economic conditions the worst economic slump in 75 years. Don Luskin has a solution for the current economic conditions: Stop rescuing everthing in sight.
I wrote here several weeks ago that the “stimulus” bill would be an expensive dud — nothing but a big-government power-grab. And I wrote last week about what a disaster the unveiling of Treasury Secretary Timothy Geithner’s half-baked bank rescue plan was. It’s now gotten even worse, now that we can see a deadly surprises hidden in the “stimulus” bill, and now that we’ve heard the administration’s plans for mortgage foreclosure relief.
No wonder my CNBC colleague Rick Santelli went a little bit berserk in his broadcast Thursday morning from the floor of the Chicago Mercantile Exchange, warning that all the bailouts, programs, rescues, stabilizations and stimuli are turning our capitalist nation into Cuba. He got the floor traders so stirred up it seemed for a minute there that an armed revolution was going to start at any moment.
It’s time that President Obama stopped proposing new bailouts on a seemingly daily basis. It’s time he let some banks fail. And it’s definitely long past time for him to pull the cramdown provisions in legislation, which would allow courts to change the contract between the lender and the borrower.
Cramdown and other provisions were proposed to help people. Unfortunately, the supposed cure is a drain on the banking system. Some solution that is. Clearly, people don’t have confidence in President Obama’s solutions. If they did, Rasmussen’s consumer confidence ratings wouldn’t be dropping:
The Rasmussen Consumer Index, which measures consumer confidence on a daily basis, rose a point on Friday and gave back that point on Saturday. Confidence fell to an all-time low last Monday and has stayed just above that level ever since. At 56.8, the Consumer Index and down nine from a month ago.
The Rasmussen Investor Index dropped a point-and-a-half on Saturday to 60.7. Investor confidence is down one point from a week ago and down nine points from a month ago.
Eight percent (8%) of Americans rate the economy as good or excellent and 10% say it is getting better.
Consumer confidence is dropping, as is investor confidence. That’s a deadly combination because it highlights the fact that investors have stopped investing and consumers have stopped buying anything but the essentials. These numbers, coupled with Timothy Geithner’s TARP II proposal and President Obama’s mortgage bailout and President Obama’s less-than-stimulating stimulus bill, are driving confidence down that this administration has the right solution to these major problems.
I’ve said in conversations before that strong economies are fueled first by smart policies, then by people simply having confidence in the American economy. It’s my theory that people are realizing that Obama administration policies are radical and risky. That combination of qualities doesn’t instill confidence in anyone.
That’s why it’s important that the administration starts adopting less radical policies. It’s also important that they stop the bailout mania. Their ‘government-should-do-everything’ attitude hurts the economy.
Continuing with that attitude won’t cure our ills. It’s time this administration stopped digging.
Technorati Tags: Bailouts, Christopher Dodd, Consumer Confidence, Economy, President Obama, Tim Geithner, TARP II, Democrats, Rick Santelli
Cross-posted at LetFreedomRingBlog
February 22nd, 2009 at 8:53 am
Marxists dictators are generally not really interested in saving economies as they are securing their position of power. Of course when a bad economy prepels them into office, its of great help for them to nationalize the finacial system, under the guise of helping the economy, and instituting all manner of populist reform and throwing tidbits at the population.
Gee 65 dollars more a month. Oh, thank you Mr President! Thank you, thank you, thank you! You are so merciful. I am but a wretched union worker, down trodden by the evil corportation I am a slave too. But you, you are my Saviour! (slobber slobber slobbder) Now I can go to a ball game and have a hot dog.