I love Batman. President Bush, not so much. But this is a great mashup of a scene from The Dark Knight (no Bruce Wayne in this scene, though) and the presidential speech made about the Wall Street bailout.

Happy Friday!

Last night, President Bush gave the second speech on the financial crisis in one week. The merits of the $700 billion bailout plan (for and against) are being debated all over the place. My main concern, though, is that President Bush’s speech merely served to highlight the fact that going forward things are going to be pretty much business as usual: More credit and more debt for everyone.

Emphasis on consumer spending enabled by debt

President Bush seemed to put a lot of emphasis on the fact that American people were having trouble borrowing money. He mentioned car loans and student loans — and even mortgages — but he didn’t mention the real driver of our economic engine: credit card debt. Perhaps we don’t want to draw attention to the fact that there is close to $1 trillion in revolving consumer debt out there.

So my question is this: Is it such a bad thing that Americans are having a hard time getting credit? Shouldn’t that be a good thing? Shouldn’t the current difficulty with regard to getting into more debt give us reason to pause and wonder what we have all this debt for?

Everything that has been done, from economic stimulus checks to Wall Street bailouts, has been done in the name of keeping the credit flowing. Our economy is based on debt. Consumer spending driven by debt is what keeps our economic engine humming. And that — obviously — is a recipe for financial and economic instability. I mean, the big investment banks are failing because they were investing in debt through credit derivatives.

Perhaps instead of trying to figure out how to keep the credit flowing (maybe the government’s creditors need to up the lending standards), we should be focusing on changes that everyone can make in their lives. Maybe we can get back to a more stable economy that values things like hard work, a strong dollar, saving and being content with modest material possessions.

My other issue: “The markets aren’t working properly.” Huh? By free market thinking, the fact that all this over-valuing and over-leveraging is coming crashing down is, in fact, a sign that the market is working properly.

What do you think?

Here is what Bush and Paulson had to say this morning:

Read my take, and share your own, on my post about President Bush and the economic crisis.

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.

Today, Federal Reserve Chairman Ben Bernanke went before Congress and testified that economic risks remain. Indeed, departing from his usual, “the economy is on the road to recovery” line, Bernanke made it clear that he is uncertain about a great deal in the economy. He also pointed out that inflation is a very real concern. Extra concerning, in fact, since there hasn’t been complementary economic growth to blunt the effects.

I think he forgot to mention, though, that the orgy of interest rate cuts the Fed made to build “confidence” in the stock market played a very large role in the inflation we are seeing.

President Bush tells us not to panic

And, of course, President Bush also addressed the American people today, reiterating that our financial system is not on the verge of collapse and that panic is not a good idea.

Read more

As part of a news conference that addressed everything from the War on Terror to ANWR drilling, President Bush took some time out to focus on the economy. He took aim at rising oil prices, as well as mentioned some of the measures (including interest rate cuts that are likely to continue tomorrow) that his administration is taking to alleviate problems in the economy. He also briefly mentioned food prices inflation.

But he, as expected, refused to say whether or not we’re in a recession. But he did acknowledge this: “It’s a tough time for our economy.”

And he made sure to blame the Democratic-run Congress for the problems.But I’m not sure that President Bush’s solutions for the economy would be that great, either. Mostly, I was annoyed with his take on alleviating energy costs as part of economic stimulus.

He wants to drill in ANWR for more oil, and boost corn ethanol production. Neither of these things is particularly good for the environment, nor would they stimulate an energy economy that would benefit most Americans.

• It would take at least a decade and billions of dollars to get anything significant out of ANWR. With American ingenuity and innovation, those billions and that ten years could be put to better use by developing viable renewable energy sources and improving existing hybrid car technology. (Or even getting cars of internal combustion.)
• Corn ethanol doesn’t really help matter much, either. It mainly results in subsidies for Big Ag, while being damaging to the environment. And, if we’re putting corn into ethanol, it makes it kind of hard to eat it — which means food prices continue to rise.

Besides, neither of these solutions is immediate. The talk is all of economic stimulus, but, really, we’re in a natural downcycle. And the growth we have been experiencing the last few years has been kept going through unnatural economic means and was unsustainable (obviously).

The government keeps touting short-term economic stimulus solutions (like the tax rebate), but none of them will ultimately work. Instead, we should focus on getting through this time while changing our mindset for the future.

Do you think President Bush’s energy plans would help the economy?