“In a free market, there’s going to be good times and bad times. That’s how markets work,” Bush told the Economic Club of New York. “There will be ups and downs, and after 52 consecutive months of job growth — which is a record — our economy is obviously going through a tough time.”
I always find it so reassuring when Bush tells us that things are not all that bad be it Iraq or the economy. There just seems to be a total inability on his part to recognize that things are not going well.
Then there was this ringing endorsement:
"I respect (Federal Reserve Chairman) Ben Bernanke. I think he's doing a good job under tough circumstances," Bush said. "Today's events are fast-moving. The chairman of the Federal Reserve and the secretary of the Treasury are on top of them and will take the appropriate steps" to deal with them.
Sort of like Brownie you're doing a heck of a job.
The fact of the matter is the Fed is part of the reason we are in this mess. Last summer it said the sub-prime mortgage problems would not pose any threat to the economy as a whole. Guess they got that one wrong.
Part of the reason for the problem was the Fed continued to raise interest rates. This had a direct effect on the rates home owners would once their adjustable mortgage started kicking in. It seems to me that once investors started getting into problems because of the way these mortgages were packaged as commodities only then did the Fed become concerned. You can see the evidence of that by the bail out of Bear Stearns, Read more about it here.
As long as this only caused problems for the little guy, the government was not all that concerned. Once investors were threaten it acted. Now we should have rules about how these types of mortgages sold to people. There should have been rules in the first place but satisfying Wall Street's greed was more important than protecting individuals.