It is now official: George Bush has Katrina-ized the U.S. economy.
“The current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the Second World War,” Greenspan said in a Financial Times commentary.
“It will end eventually when home prices stabilise and with them the value of equity in homes supporting troubled mortgage securities,” he said, referring to the meltdown in the US sub-prime home loan market and subsequent massive losses for the banks holding the debt instruments.
“The crisis will leave many casualties,” he said, his remarks coming after Bear Stearns, the fifth largest US investment house collapsed Friday and was taken over by JP Morgan Chase for a fraction of its value of only a week ago.
But Pres. George W. Herbert Hoover Bush says his government has stabilized the crisis — and it wasn’t even all that difficult. It just required putting in a little O.T.:
“I want to thank you, Mr. Secretary, for working over the weekend,” Bush said as he met with his economic advisors at the White House. “You’ve shown the country and the world that the United States is on top of the situation.”
Actually, many analysts and critics said, by focusing on Paulson’s working hours instead of on the fear gripping Main Street and Wall Street, the president seemed to show just the opposite — that he has failed to grasp the gravity of the country’s economic crisis.
“He has no idea what’s going on. Even by his standards, he’s wrong,” said Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, who said he had been trying to get the president to pay more attention to the economy for more than a year.
Bush’s “working over the weekend” line also suggested a comparison to another disaster in which he was accused of acting too slowly: Hurricane Katrina. After the storm, the president was ridiculed for praising FEMA Director Michael D. Brown for doing “a heck of a job” — even as thousands remained stranded in floodwaters in New Orleans.
Our worst fears are confirmed. This makes it official: George Bush has Katrina-ized the U.S. economy.