WASHINGTON — Warning of the risks of a further slowdown and higher inflation, Ben S. Bernanke, chairman of the Federal Reserve, offered a gloomy assessment of the economy on Tuesday as President Bush, speaking a few blocks away, urged Americans to have faith in the country’s financial foundation.
In testimony before the Senate Banking Committee, Mr. Bernanke avoided the word “recession” in characterizing the current economy, noting instead that consumer spending and exports were keeping growth “at a sluggish pace” while the housing sector “continues to weaken.”
He added that spending for personal goods had “advanced at a modest pace so far this year, generally holding up somewhat better than might have been expected given the array of forces weighing on household finances and attitudes.”
While the risks to the overall economy were still “skewed to the downside,” he said, inflation “seems likely to move temporarily higher in the near term.”
So Fed Chairman Ben Bernanke is telling Congress, and the American public, that the U.S. economy will grow "at a sluggish pace" due to the housing problems, inflation will increase, and consumer spending will "advance at a modest pace." In other words, the U.S. economy will enter into a recession, even though Bernanke avoids using the word "recession." So the crap is hitting the fan.
Now let us head over to the Bush White House, and hear what King George, The Deciderer had to say about the U.S. economy. From MSNBC News:
WASHINGTON - President Bush urged lawmakers on Tuesday to move quickly to help prop up mortgage giants Fannie Mae and Freddie Mac, while declaring the nation's financial system to be "basically sound."
"We must ensure that they can continue providing access to mortgage credit during this time of financial stress," Bush said of the two mortgage giants.
[....]
Bush said the two troubled mortgage companies play a central role in the nation's housing-finance system and that government action to help them were not bailouts, since the two would remain shareholder-owned companies.
"I don't think the government ought to be involved in bailing out companies," Bush said.
Amid soaring gas prices, the toughest real estate market in decades, falling home prices and financing that's harder to come by, Bush said: "It's been a difficult time for many American families."
But he also said that the nation's economy continues to grow, if slowly.
[....]
"I understand there's a lot of nervousness," Bush said. "The economy is growing. Productivity is high. Trade's up. People are working — it's not as good as we'd like. And to the extent that we'll find weakness, we'll move."
I seriously have to wonder just what kind of idiots do we have working in Washington these days? Bernanke is talking about how the U.S. economy is heading into a recession, without actually admitting that the U.S. economy is heading into a recession--even though everyone knows that the U.S. economy is slowing down and heading into a recession. It is like Bernanke is claiming that the sky is falling without saying that the sky is falling. Talk about doublespeak here.
But I'm not surprised about Bernanke's comment--the Fed Chairman has a way of talking around both corners of his mouth as a way of hedging his own bets on where the U.S. economy may be heading to. And Bernanke is talking this way to reassure investors to continue investing their money into a weakening U.S. economy. The real irony that I find is how Bernanke is telling Congress one thing, and President Bush is telling the American people the other. So even though the housing mess has caused the U.S. Treasury to bail out Fannie Mae and Freddie Mac, speculators have caused oil prices to rise, Americans are hit with $4 a gallon gas prices, inflation is rising, jobs are being lost, President Bush still admits that the U.S. economy is still growing strong. There is still nothing to worry about.
So that is why Mr. Bubble Boy is still at 28 percent approval rating.
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