George Bush and the Economy
President No Longer Believable When He Says a Bailout is Necessary
Sep 25, 2008
It was quite ironic to see President Bush in front of the American people giving his case for why the government should bail out Wall Street to the tune of $700 billion. It was ironic not so much for the fact that Bush was arguing for governmental intervention in the economy, but more so because the message was that the bail out must go through in order to restore credibility to the American economy. Keep in mind that this message was coming from a man whose credibility went south a long time ago.
Aside from the bad investments that got us into this mess and looking ahead, the problem on Wall Street in a nutshell is that investors do not have faith in the economy. If they do not have faith, they will not invest. If they do not invest, the money supply begins to drop. When the money supply drops, the money becomes more scarce, and lending institutions become increasingly cautious about how they spend that money. So, that makes it harder for ordinary Joes to get credit, whether it is for a house, a car, or college tuition. In essence, the economy loses its credibility with investors
Now, back to the irony. The word “credit” comes from the Latin credito, which means to believe or have faith in something. There are several derivatives of the word—“credence, “credibility,” “credible,” etc. In terms of lending money to someone, it is the belief that the borrower will pay back that money. He has been extended credit. In terms that every American can understand: Bush’s credit was maxed out long ago. The American people no longer believe what he has to say. So, why should we believe a man who has lost all credibility when the essence of his message is that we have to take a specific course of action to restore credibility to the economy?
Of course, Bush and the rest of his buddies are not classifying the bailout as an expenditure because, in the words of Bush, “[M]ost, if not all, of the tax dollars we invest will be paid back.” This is also the same administration who told us that the Iraq War would pay for itself after telling us that there was no doubt that Iraq had WMD.
So when Bush backs a plan created by Henry Paulson, Secretary of the Treasury, that has no oversight, no accountability, and unlimited discretion on how to spend $700 billion, it should frighten every American. Thank goodness for Congress, which appears to be a bit more level-headed than the spend-happy Bush administration.
That is not to say, of course, that the government should do nothing. One needs to look no further than the Hoover administration to see what governmental inaction looks like after an economic crisis. But the American people need to hear about the government’s plan from someone who can be trusted, and who doesn’t have an awful track record of eight years.
