The Wash Post's Howard Kurtz has a good wrap-up about reaction to the prez's press conference last night and ruminations on why Bush's poll numbers are sinking. A snippet:

Political prognosticators sometimes forget that average folks don't follow every twist and turn of Beltway infighting. So keep in mind: Gas prices have been rising. The stock market has been in a swoon. The economy is not exactly inspiring confidence. All that has got to be hurting Bush. When people feel economic anxiety– and see that their leaders appear more obsessed with one brain-damaged woman, parliamentary procedures and fiddling with their retirement money–that's when you suffer in the polls.

Whole thing here.

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  1. I feel sorry for Bush.
    He’s “fiddling with their retirement money” when he should be playing the drum. To wit:

  2. Finally, a commentator who puts his finger on what will really torpedo the Republicans in the long run – the impending collapse of the credit/mortgage finance bubble. For 10 – 15 years I’ve watched the US pursue one of the most irresponsible fiscal policies in financial history, and at long last the bills may be coming due.

    This country now produces virtually nothing, consumes everything, soaks up the world’s savings pools to finance its ballooning public and private debt, and believes that this behavior is somehow its inherent right. A huge factor in ballooning oil prices has been the steady decline in US dollar value over the last 2 years, a phenomenon masked by enormous inflation in housing and fixed asset values. Since houses are generally non-income-generating, the only way for most people to realize this “wealth” is to either sell the asset or leverage the hell out of it via refi or home equity loans. We’ve done that sensationally well, as we now carry some $2.6 trillion in real estate debt (~30% of GDP). For some other eye-popping numbers, check out the summary here.

    This country simply can’t keep running up enormous trade and current-account deficits, pile mortgage-baked derivatives on top of each other and expect our central banking pals in China and Japan to keep buying our decreasingly attractive Treasury securities. There’s no way to predict exactly when the pyramid will start crumbling, but crumble it must.

  3. Bush: “There’s a hole in that promise.”

    joe: “Is the hole full of Iraqi Weapons of Mass Destruction?”

  4. The fact that deficit spending on boondoggles such as the Iraq war have exacerbated Federal fiscal problems does not imply that the fundamental structural problems with SS do not exist.

  5. I’m just goofing.

  6. Did anyone else notice that he didn’t say, “…without raising taxes,” but instead, “…without raising the payroll tax rate?”

    That’s a pretty big difference.

  7. Did anyone else notice that he didn’t say, “…without raising taxes,” but instead, “…without raising the payroll tax rate?”

    I did.

  8. I’m unconvinced that the “housing bubble” is an impending crisis. Yes, a lot of people bought houses at inflated prices on adjustable rate loans. When those rates go up, some of them won’t be able to service their debts.

    …If banks have problems selling reposessed assets, that could be a problem; but that’s a question of magnitude, isn’t it?

    Inflection points are always scary.

    As far as Chinese and Japanese Central Banks go, I don’t think that’s a big worry. I think we should be more concerned about what the little old ladies in Japanese post offices are going to do with their American bonds when they roll over. …and that means worrying more about the budget deficit than the current account and trade deficits.

    …and joe’s right, spending all that money on Iraq hasn’t helped us one bit.

    P.S. I blame higher oil prices on higher energy demands in China and elsewhere in Asia–among other things.

  9. Ken is right-
    Asia is coming online and sucking resources up and are willing to pay more for it. China with billions of people coming out of the “third world” status are putting their bikes aside and buying cars, more manufactoring and higher standard of living.

    Gas/oil isnt the only thing either. Dont forget metals (steel) and corragated paper. The list will grow to many more things

  10. So I guess this means Dubya’s chances of being re-elected again are practically nil, huh?

  11. There was a press conference last night?

  12. I can’t wait for the crash; if it ever comes. :{>

  13. “Inflection points are always scary.”

    I posted that while on the phone–lame excuse, I know.

    Anyway, if I had that comment to post again, I’d have cited Shultz’s Second Law of Social Dynamics which states explicitly that, “Trends tend to reinforce themselves until they’re overwhelmed by a greater, countervailing trend.”

    …Worldwide deflation, Asian currency crisis, Newt’s balanced budget, etc. put us on the trend to low interest rates; worldwide growth, Asian currency appreciation and Bush’s bloated budget surely represents a greater, countervailing trend. …or so I would think.

    Terrorism set in motion the trend that’s driving politics today. If the old saws on terrorism aren’t reinforcing the trend anymore, according to Shultz’s Second Law, there should be a greater, countervailing trend somewhere. …So where is it? I see no such thing.

    No countervailing trend, no inflection point. Despite the recent approval ratings dip, the Bush Administration will probably stop trying to roll the Social Security ball up the hill, and their numbers will probably stop dropping.

    …If there are any changes in the next congressional election, chances are that newly elected Democrats will exploit the same prevailing trend in the same way.

  14. I swear to God I wasn’t making a point.

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