Delusion and denial

George W. Bush is about the only one left who doesn't think the US is already in a recession. Today at The Economic Club of New York he did admit that the economy going through 'tough time' but once again denied it was in recession. Now I really hate to compare George W. Bush to Herbert Hoover, Hoover was a very intelligent man and a true humanitarian, but Hoover's anti government ideology led to the Great Depression and George W. Bush seems to be advocating the dame ideology.

NEW YORK - President Bush preached optimism and Republican orthodoxy of minimalist government intervention Friday as the best approach to an increasingly troubled economy.

[.....]

His main message, aside from displaying confidence in the U.S. economy’s underpinnings and historical resilience, was to caution against overreaction by policymakers that could damage the economy’s short- and long-term prospects, something he did about a half-dozen times in 40 minutes of remarks.

Now Bush may deny the economy is in dire straights but the rest of the world doesn't. As I pointed out below much of the world sees the dollar as little more than Monopoly money. And we have this:
US Faces Severe Recession, Feldstein Says

The United States has entered a recession that could be "substantially more severe" than recent ones, former National Bureau of Economic Research President Martin Feldstein said Friday.

"The situation is very bad, the situation is getting worse, and the risks are that it could get very bad," Feldstein said in a speech at the Futures Industry Association meeting in Boca Raton, Florida.

NBER is a private sector group that is considered the arbiter of U.S. business cycles.

Feldstein said the federal funds rate is headed for 2 percent from the current 3 percent.

He added that lower short-term rates from the Federal Reserve would not have the same impact in the current downturn, in terms of reviving economic activity.

And he repeated what Krugman said earlier, there isn't much the FED can do about it at this point.

There isn't much traction in monetary policy these days, I'm afraid, because of a lack of liquidity in the credit markets," he said.

The Fed's new credit facility, announced on Tuesday, "can help in a rather small way ... but the underlying risks will remain with the institutions that borrow from the Fed, and this does nothing to change their capital," Feldstein noted.

There is another big difference between Hoover and Bush, Hoover had several administrations preceding him that contributed to the economic armageddon, in Bush's case it's all his.