The No-Confidence Man

Bush's Words

Jennifer Loven writes for the Associated Press: "As Wall Street reeled and global markets plunged, President Bush on Monday said the U.S. economy is going to be 'just fine' in the long run. But he cautioned that the massive rescue plan will take time to work.

"On another jittery day in the financial markets, the president made two rounds of unscheduled comments on the economy -- first after meeting with small-business owners in San Antonio, and then at the top of a speech in Cincinnati about judicial nominees."

Here are Bush's remarks in San Antonio: "[I]t's going to take a while. I signed the bill on -- last week, but it's going to take a while to get in place a program that, one, is effective; two, that doesn't waste taxpayers' money -- we don't want to rush into this situation and not have the program be effective. It's going to take a while to restore confidence in the financial system. But one thing people can be certain of is that the bill I signed is a big step toward solving this problem. . . .

"We'll make sure, as time goes on, this doesn't happen again. In the meantime, we got to solve the problem. And that's why people sent me to Washington, D.C. When you see a problem, put a team together and solve it."

Here's Bush in Cincinnati: "I believe in the long run this economy is going to be just fine. It's a resilient economy; it's a productive economy with good workers. This is a reminder that we have been through tough times before, and we're going to come through this just fine."

The Blame Game

Dean Baker writes for Huffingtonpost.com: "According to the Washington Post, after the initial defeat of the bailout package in the House last Monday, Treasury Secretary Henry Paulson went to see President Bush in the White House. The Post reports that President Bush asked Paulson about 'Plan B.' According to the Washington Post, Paulson told Bush 'there is no Plan B.'

"Of course this was not true. Paulson could have easily designed a bailout plan that was centered on the direct infusion of capital in the banking system... Virtually every economist who has written on the bailout argued that a direct infusion of capital is a far more effective approach to dealing with the financial crisis than the approach outlined by Paulson. . . .

"This alternative approach almost certainly would have passed by an overwhelming majority in both houses of Congress since it could easily be structured in a way that ensured that the banks were not being rewarded for their incompetence at the taxpayers' expense. This was a major factor behind the public's outrage over the bailout.

"If the Post accurately described the meeting between Paulson and Bush (there is no source given for this account), then Secretary Paulson badly misled President Bush on the most important economic decision of his presidency."

Tom Frank writes at TPM Cafe: "'Government should be market-based,' George W. Bush once said, and from this supremely bad idea has flowed everything from the lobbyist orgy of the last thirteen years to the outsourcing and privatizing of federal operations to the industry-friendly regulatory agencies that let the current financial crisis happen. The error, obviously, is that markets are not democracies; private businesses answer to those with the most shares--the most money--not to we the people."

Deficit Watch

Stan Collender writes for Roll Call: "Because of [the Troubled Assert Relief Plan], my estimate is that the budget deficit could easily reach or exceed $1 trillion this year. This includes my estimate of a $600 billion deficit before TARP and an additional $400 billion afterwards. A deficit of that size would be between and 6 percent and 7 percent of gross domestic product, a level that hasn't been reached since fiscal 1942-1946 when the United States was fighting and paying for the direct costs of World War II.

"But the bigger cost of TARP may well be less in dollar terms than in making progress in other areas. A $1 trillion, 7-percent-of-GDP deficit likely will chill most of the spending and taxing plans of whoever is elected as hoped-for tax cuts and spending increases have to be delayed."