Obama Takes On The Economy--New Deal Style

President-Elect Obama (it's still fun to say that) has been busy putting together a team of the right people to solve the economic crisis. That formally includes Tim Geithner and Larry Summers now.

His goals? A New New Deal.

Obama wants to create 2.5 million jobs by 2011 by re-imagining and rebuilding America's infrastructure. Such long term investments in our infrastructure saved us from the grips of the Great Depression and it's so comforting to hear a plan talked about like this. As Robert Reich puts it, this is a "down payment" on America's economic future.

It's so gratifying to hear about change from the bottom up--from the worker to the CEO instead of the other way around. When the population is employed and paid, they are happier and better contributors to society, thereby creating a community that people want to save. An investment in America's workforce is more than just a temporary bandaid, like the Bailout of 2008 is, it's a permanent committment to keeping America working.

So, where do we go from here? The next step has to be health care. People need a health care system that works--that provides care for all, instead of for the fortunate few. If people have jobs and health care, there's no telling where our society could go.

Citigroup Gets Keys to the Candy Store While the Big 3 Can't Get a Candy Bar

Here's a joke for you--Ford, GM and Chrysler all engage in plans to turn around their companies prior to the financial crisis. They all engage in new technology development, organizational changes and financial upgrades. Granted, they still have problems, but they were at least working on them. Meanwhile, Citigroup is one of the main perpetrators of the mess we're currently going through. They gave away bad mortgages, sold them to the highest bidder as assets and basically undercut the market to get a stock advantage. Then they hit the skids when the rest of the country did, in large part to the tactics they used in the past ten years.

The punchline? Citigroup gets a huge multi-billion dollar bailout in the form of cash that does not have to be repaid while the automakers, who employ hundreds of thousands of people, can't even get a loan.

I just don't get how the auto industry became the proverbial red-headed stepchild of our economy. This focus on the financial and service industry is going to leave us a poorer country in the short and long runs. We have to have a manufacturing base to compete in this world. The financial sector has to be fixed, but just handing over the keys to the candy store to those who robbed the candy store and poisoned the customers in the first place isn't a great plan.

And yet we're willing to let the automakers go bankrupt and not the financial sector that was in large part to blame for this mess. I guess the lesson is just to foul things up as much as possible and then you'll get help. If you actually try to help yourselves, you're screwed.

Further and Further We go

The Dow Jones Industrial Average--otherwise known as the bain of our collective existence as of late--has sunk to a new low. It closed today under 8,000--its lowest closing since 2003.

I'm really out of ideas on this one. Or maybe I'm just cranky today. Either way, let's get it together, America. We're falling apart at the seams.

The Bailout is "Working"

Here's a joke for you: two bald dudes walk into a Congressional hearing room and testify that a multi-billion dollar mess is working.

That's it. There's no clever punchline.

That's what Ben Bernanke and Henry "Hank" Paulson are doing today. They're sitting in front of members of Congress and lying through their teeth. Either that or they're delusional. I can't tell yet.

Meanwhile, the Big 3 and their entourage are in D.C. today for hearings on their measly $25 billion bailout request. People ask whether the auto bailout will work, and skepticism is more than healthy given the failings of our last bailout. I guess for this commentator, the differences are enough to give it a go. The CEOs are placing their mea culpa at the feet of a very angry and actionable Congress, though, so who knows what the outcome will be?

What I do know is this: there are American families hurting and they'd like to be next in line for this government cheese.

And Boom Goes the Stock Market...again....today.

Just a reminder that a 700 point drop at close isn't a good thing.

As if you needed one.

Is this what it felt like in December 1929?

I just ask because every day there's another reason to doubt the stability of our economic system. Today's lovely news--the Dow has closed below 9000 after dropping 600 points in a half an hour at the end of trading.

I'm not kidding. I am not making this up.

I often wonder what people though about in the days and weeks leading up to a major catastrophe. Like what did we think on September 10, 2001? What were our main issues. I'm now wondering what we were thinking September 14, 2008, because it seems since September 15th, we've been nothing but screwed.

I'm not the only one who questions whether this is another Great Depression.

There used to be one Great War. People called it that because it was the biggest war of its time and the world would never see the likes of it again. Then World War II happened. Are we on the verge of World Depression 2?

I think they should call it a day.

The stock market has taken a nose dive, the likes of which hasn't been seen in a long time. Even the events of my birthday weren't this bad. Apparently, Wall Street, like every other street in America, has lost faith that a true measure to save the economy will pass.

It seems every day for the past two weeks we have been waking up to more incredible news. I thought this was a one-week thing, but it continues like a daily alarm clock ringing--only we can't hit the snooze button. Today it was Wachovia. Pretty soon there are going to be two or three banks in America, and although they'll be strong, I'm not sure that's a good thing.

I don't have time to read the 110 page tome that is the "Bailout Bill". But you can read it here, if you want.

I'm not alone in this questioning of the bailout. There are many people like me who question whether this bail out will work, when it will work and what it will do to any hope of getting help to the people who really need it. As you can see, my concerns are multi-fold.

First, will this bill even work? Are the firms that have bad debt going to be around to take part in the clean up? Wachovia won't be there. Washington Mutual won't be there. Bear Stearns won't be there. Leheman Brothers won't be there. So basically about 50-75% of the people who created this mess have left the party before it ended and therefore can't help to clean up. Is this enough?

Second, if it works, when will it work? Sure, the world has become a much faster place with a pace that rivals Robin Williams on his most crack-ridden day, but at the same time, how is it possible for just a mere vote of confidence to lift the markets? And really, that's what the bill is intended to do for right now.

Third, regardless of when and if it works, will this end the sense of urgency that allowed for bipartisanship in the first place? In other words, what about struggling home owners like Mom and Dad Grace. Will they get anything down the pipeline? Or are we done? I fear that once the urgency is over, the work will not get done. So health care, housing, etc., will just be trampled on in the meantime. I don't think the average American had high hopes of Congress helping them, but damn it, if this passes, they'll have to lower their expectations even more. And that just ain't right. Maverick McCain might think the fundamentals of the economy are strong and the American worker is strong--but if the American worker has no work, then the whole thing falls apart.

We need a New Deal, folks. Corporate bailouts without populist policies to aid the everyday American are nothing more than a screendoor on a submarine. DadGrace would tell you that.

As I write this, it appears the bailout bill has stalled and might fail.

I hope by the end of the day we have an economy at all.

Education Week--Is it Doomed by the Economy?

I'm trying to resist my commentary on the economic crisis better known as the Depression 0f 2008 in order to bring you a fully informational Education Week.

I just wanted you to know that it's hard. And I'll probably talk about the economy later today.

Imagine There's No Money

It's easy if you try. In fact, it's easier than ever before.

Though I appreciate the banter yesterday, I can't help but point out that the so called "Free-Market Capitalists" that stopped by yesterday have some 'splainin' to do. The market just sank again.

For the record, here is my problem with "Free Market" economics. First, it's a total misnomer--the bailout of AIG today is just an example of that. People who believe in the so-called "Free Market" actually believe in just being left alone when times are good. When times are bad, Uncle Sam is called in to bail them out. That's not a free market. That's a co-dependent market. (For the record, I'm pretty sure these people also think that pulling one's self up by one's bootstraps is always a possibility--a topic for another day...we're talking macro, not micro.) If you want to bail out important companies, that's fine--at least say so.

Second, I do believe that corporations should be taxed fully. What do I mean by this? I believe creating loopholes is a bad idea. Tax credits for good behavior (providing health care, keeping jobs in the States, etc.) is a great idea. But tax credits require monitoring--and if you claim to want a "small" government, you can't also claim that tax credits are a good thing. The two ideas are incompatible. The reason the tax code is so fat is because corporations and people have taken advantage of every inch of that thing. And in the same way in which a bad parent disciplines, the government has seen fit to create more rules instead of enforcing the ones they have--because enforcing creates more government.

Which brings me to my third point--government is not the enemy. The fact that there are examples of governmental waste does not make it unfit. In fact, there are studies that show that government-funded and operated Medicaid programs are much more efficient than privately owned plans (yet conservatives want the tax-credit-for-private-insurance-program...go figure). The difference? No one profits. And frankly, no one should profit from health care.

These are the facts. I appreciate the comments yesterday, but many of them had to do with Obama's personality or McCain's alleged "maverick" streak. Let's talk basic economic facts. That's a conversation I'd love to have.

It's Time to Pounce, Blues

CNN agrees with me--it's time for the Dems to trample the Republicans on their most vulnerable issue--the economy.

For a change instead of insulting what people are saying, I'm going to give a list of things that need to be said about John McCain. These are in no particular order except for the first one:

1. This one is for all of us, Blues and Reds: We need to put our social issues (abortion/choice, same-sex marriage, etc.) and come together on the one issue that affects us all more than any single issue ever could. It is only then that we can truly make a difference as a nation.
   
2. John McCain does not stand for change nor does he even understand the concept. John McCain is not a maverick. A maverick is someone who stands up to things that don't work and either fixes them or gets rid of them. Amongst the things that John McCain has not stood up for, fixed or gotten rid of: (a) an antiquated tax system which favors the wealthiest amongst us with more feedback than a bad mic at a Metallica concert; (b) a campaign finance system in which he doesn't even believe; (c) lasting, proper and meaningful dialogue on the immigration issue. (Don't even try and tell me those matters don't impact the economy.)
   
3. John McCain hates regulation, so his quip yesterday about Wall Street's regulation needing work is absolutely worthless.
4. John McCain has sided with big business far more often than he's ever sided with the "American Worker" he claims is so fundamentally strong.
5. John McCain couldn't find the middle class with a map, a compass and an invitation to K-Mart. He claims he was joking about the "less than $5 a year" comment, but odds are he wasn't. He doesn't understand that a tax credit for something does nothing to help people do anything.
   
6. John McCain fails to understand what it is like to be a regular American homeowner. As Joe Biden alluded to at the DNC, how can you have a kitchen table conversation when you don't know which kitchen you are supposed to be at? This is exascerbated by the fact that his campaign staff and he believes that Fannie and Freddie should be spun off into private companies. Great. This privatization of the bare minimum has to stop.
   

The problem isn't just attacking McCain, though. The problem is us figuring out what our message needs to be. Here are some talking points for that:

1. Health care is priority number one. If people dont' have to worry about health care, they are more able to find a job based on other factors and truly live out the American dream. Tax credits, as McCain proposes, to privatize the system are inadequate and could actually do harm in an area where "do no harm" is the motto.
2. Governmental programs are good--a small government never solved problems. McCain and the Republicans are fatally flawed in believing that privatizing everything leads to greater business advantages. Perhaps that's true for the 3% already on top, but it neglects to take anyone else into account. We all can't be entrepreneurs or small business owners. This cannot stand as a service economy. The American Worker may be fundamentally strong--but it doesn't mean jack unless he has a job.
   
3. Cutting taxes isn't the answer. It is merely an over-used and tired old campaign tactic started back in the 80s when taxes were actually high. Taxes are the lowest they've been in 50 years. Lowering them more can only hurt us.
   
4. It's one thing to bail out federally-backed industries, but those same rules must apply to individuals. It shouldn't be shameful to get governmental assistance. Companies do it all the time. We need to shed light on that.

What did I miss?

Happy Birthday Sam Grace! Sorry the Economy is Going to Hell.

Yes, ladies and gents, it's my birthday. You can read all about my crazy weekend here.

In not so great news, it appears that the economy is hanging by a thin thread...not even good strong material. It's like a shitty poly-blend thread that wasn't formulated right. Oil was down to $96 this morning and is now at $94, which normally would be a great thing, but such a quick drop is nothing helpful to an already unstable market.

For Christ's sake, even George W. Bush is acknowledging the mess of it all. Well, sorta. Hell, even McCain was blasting bank regulators (probably right before having lunch with them...maverick my ass).

No one is safe...Merill is bought out, Lehman is down the tubes, everyone else is in jitters just waiting for the closing bell. It's kind of awkward to think my birthday might be remembered for something like this.

We're being told not to spend, but screw that. I'll spend what I want on my birthday. And tomorrow, when the economy collapses, it'll be just grand.

Am I Dreaming? Gas is going down?!?

The nice part about working 8 miles away from work is that I fill up only once a week. The bad part about filling up once a week is that it still costs an arm and a leg. (You'd think a 2003 Neon would be more fuel efficient than it truly is.)

So lately I've noticed that gas prices have dipped some. I'm not the only once that has noticed this. It's true--gas prices have fallen for 20 days in a row. This must be a record for 2008.

I should probably fuel up before reality sets in and I wake up again. It's sad that I dream of cheap gas.

Does Anyone Still Think This Isn't a Recession?

51,000 people lost their jobs in July alone. The jobless rate climbed to 5.7%. This was the seventh consecutive month of job constriction (loss of jobs).

I think it's pretty clear we're there. America's economy is in the shitter, folks. Stop waiting for someone important to say what we all know this is--a giant mess.

What staggers me isn't that we're in a Recession. These things happen and with GWB in power, it was bound to happen (cutting taxes for the rich doesn't do anything but leave the government with less money and less jobs and thus people who can't spend). What truly staggers me is talked about here: when the big businesses are in trouble (Freddie Mac and Fannie Mae or Bears Sterns), Washington jumps through hoops to make things happen. But when the average Jane on the street can't get a job to save her life, Washington ignores her plight.

I couldn't agree with this any more:

The bailouts are rewarding the very people and institutions whose reckless behavior caused this financial mess. Yet government demands nothing from them in return -- like new rules for prudent behavior and explicit obligations to serve the national interest. Washington ought to compel the financial players to rein in their appetite for profit in order to help save the country from a far worse fate: a depressed economy that cannot regain its normal energies. Instead, the Federal Reserve, the Treasury, the Democratic Congress and of course the Republicans meekly defer to the wise men of high finance, who no longer seem so all-knowing

So don't be surprised when these bailouts turn into more trouble than they were worth. I know I won't.

Instead of making more social safety nets for the average American, as Robert Reich has suggested, we're making safety platforms for the very businesses that caused this mess to begin with. And why are we doing that? Well because they paid for the campaigns of those in power.

Don't get me wrong--we need to bail out these companies to a certain extent to save ourselves. But if all we do is bailout the bad guys, we're left no better off and maybe even a little worse for wear.

Holy Deficit, Batman!

I didn't expect much, but I didn't expect this.

The White House has projected a record. And of course, it's not a good one. The George "Let's Cut Taxes Right and Left" W. Bush White House has announced today that it projects a record deficit for 2009 of $482 BILLION (said in a Dr. Evil voice).

You know that this doesn't shock me. But here's what does: there are still people out there that think massive tax cuts that do nothing to stimulate economic growth are good things. This amazes me. Anyone with a quarter of a brain has got to realize that disaster looms when you deplete the country's funds on all sides (two-front war, anyone) and the give massive tax cuts to the rich who don't spend that money, but save it (this is why Reaganomics or Trickle-Down economics do not work). Don't worry about that giant surplus Clinton handed to you, Dubya--just spend it all on your precious oil war.

I mean what's next? Yes, Virginia, there is a Santa Claus but he's not coming this year due to fuel prices.

Just shut down the country and start from scratch. And appoint Robert Reich as head of the Fed already.

Cash or Credit Fiasco of 2008--I'm At War

I never thought we'd again see the day when the form of your payment dictated the total of your purchase. I thought the credit card companies had put an end to that with their merchant agreements and, in general, the market dictated that such a charge was not acceptable.

So imagine my surprise when my local gas stations start conning people by posting different prices for cash and credit. And not just a couple of cents--at least 10 cents a gallon. I thought this was a local thing, but it turns out it's happening everywhere. The same price cash or credit mindset is gone.

I haven't paid for gas with cash in years. I kind of refuse to start now.

But then I went through my local McDonald's drive through last week and was blindsided by a sign which told me that paying by a credit or debit card would cost me an additional $.25. WHAT? Outrageous!

So what did I do? I paid it.

But then I picked a fight.

Not only did I report them to the credit card companies, but I called the McDonald's headquarters when I couldn't get through to the local store. Within days I had a call from the local store's manager. And this week, CVD told me of a small victory. I think. The store has stopped charging the fee. Instead, like the many gas stations in my area, there is now a different price for cash and credit.

When will this end? The whole point is that merchants get more money when they allow credit purchases because we are becoming a cashless society. Plus, when people aren't constricted by cash on hand, they spend more.

So tell me, why are we paying the merchants to use credit cards when the deck is already stacked in their favor? And why aren't the credit card companies enforcing their merchant rules?

Perhaps because the credit card companies, like the merchants, don't have the consumer's best interest in mind. (BLASPHEMY!) Perhaps, because they don't understand that the consumer can only take so much and that, in the end, they are only hurting themselves.

Perhaps the world has just gone mad.

So here is my approach:
1. Report all merchants I visit that use such an improper system.
2. Chose gas stations who just have one price.

That's all for now. I'm sure there will be more.

So We Can Nationally Bail Out Businesses But Not People?

Don't get me wrong, I'm all for us propping up the housing industry as much as is necessary to get it moving in the right direction, but I don't understand the backwards thinking that allows some people (read: Republicans) to believe it's hunky-dory to give hand-ups to giant mortgage companies like Freddie Mac and Fannie Mae (while at the same time going to war against shady lending practices (read: what got these people rich in the first place) and not to give hand-ups to individuals who, it has been scientifically shown, make this economy work.

Where's Robert Reich right now?

Nope, We're Not In A Recession, Virgina

The financial market has pretty much hit the skids today. Any progress that was made yesterday in the slight upswing was briskly escorted out the door and asked to never return.

Not only are Fannie Mae and Freddie Mac on the brink of total meltdown, but they sent the stock market tumbling to its lowest point in over 2 years.

And I'm sure somewhere, GWB is just smiling that stupid shit-eating grin of his and going about his pleasurable day. Grrr.

Can someone get Robert Reich on the phone and just hand control of the economy over to him? This Paulson guy seems about as helpful as pay toilets in a diarrhea ward.

Robert Reich Strikes Again

God, I cannot explain how much I love Robert Reich, commentator for Marketplace and former Clinton cabinet member. His commentary this week about how the downward spiral of the economy is caused not just by the lack of jobs and high energy costs, but by stale and stagnant wages is brilliant. So, yet again, I'll post it here and bask in it's glory.

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Robert Reich: The economy is failing, but it's now clear the Fed won't revive it. It figures if it cuts interest rates, global investors will move their money out of dollars, causing the dollar to drop further, meaning more inflation as the price of everything we buy from the rest of the world, including much of our oil, rises even faster.

Yet American consumers cannot stimulate the economy on their own because they don't have any money left. And exports can't make up the difference. So how to get back on track?

Blue Dog Democrats, Calvin Coolidge Republicans and Ross Perot Independents all must understand the critical importance of a fiscal stimulus right now. And it has to be on the right scale. Distributing those little stimulus checks last month was like dispensing aspirin for pneumonia: momentary relief for a whole system desperately sick.

The fastest and strongest stimulus would be a one-year exemption of the first $15,000 of income from payroll taxes, starting as soon as the bill is signed. Congress still has time to pass this before the session ends.

This should be followed soon after the next President is sworn in by major infrastructure spending based on a newly-formed capital budget. Expand public transportation, fix hundred-year-old sewer and water systems, rebuild levees, invest in green technologies. All this will get the economy moving and bring it into the 21st century.

But to keep the economy moving, the middle class will need to get back some of the buying power it's lost over the years as almost all of the benefits of growth have gone to the very wealthy. The surest way is through a middle-class tax cut financed by a tax increase on those at the top.

In other words, now that the Fed's hands are tied, we need a bold fiscal policy, a stimulus large enough to get the economy moving again and a progressive tax system large enough to keep it moving. The question is how low the economy will have to sink before there's political will to do this.

---

A-to-tha-men.

Flawed Flawed Flawed

This piece was on NPR's Marketplace Report yesterday. Some professor did a study of health during economic downturns and found that on a macro level, the health of the area in economic turmoil was better than average. I couldn't help but think of the many huge (and I mean enormous) flaws in this research while listening to the piece.

My comments are in bold/italic.

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Kai Ryssdal: $3.60 a gallon's gonna be the magic number this summer. The Department of Energy said today that's where gas prices should top out.

Which, if you really think about it, might turn out to be good news, because chances are paying that much will make most of us think twice before we take to the open road. Which'll mean less traffic, less stress, and probably less pollution, too.

In fact, economist Chris Ruhm at the University of North Carolina Greensboro's been studying exactly that phenomenon.

---

Ryssdal: Thanks for being with us.

Chris Ruhm: Thanks. My pleasure

Ryssdal: You know, you'd think that bad economic times would do bad things to your health and to society's general well-being. You're telling me that's not true?

Ruhm: Well, what I'm telling you is that bad economic times are actually good for your health. Now, I'm not saying they're good for society, but they do turn out to be good for your physical health?

Ryssdal: How so?

Ruhm: What we find is mortality rates of all kinds fall when the economy weakens, so total mortality, vehicle mortality, deaths from heart attacks, various health conditions like back problems become less prevalent and then people behave in a healthier manner, that is they smoke less, they drink less, they're less likely to be obese.

First of all--mortality is not the only part to health. There is this little thing called "life" that people must go through and if they're unfortunate enough not to be 100% healthy, that's not really fun.

Second of all--just because "various conditions...become less prevalent" in the statistics doesn't mean they don't exist. Perhaps (and this is a pretty good and solid assumption), people don't report these problems as much in poor economic times because they don't have health insurance. Just a thought.

Third--you all know how I feel about the word "obese".

Ryssdal: Now is that generally just less stress because you don't have to deal with all the craziness at work?

Yeah, Kai--because worrying about finding a job and paying your bills and feeding your kids ain't stressful.

Ruhm: That may be part what's going on. There's also environmental risks like reductions in pollution levels and people have more time, so they might have more time to exercise. Part of it might be an income story too. If you don't have as much money, you don't go out to eat as much. When you go out to eat, you tend to eat fatty meals, maybe you drink and smoke, so it could be a combination of factors

Ryssdal: What about everyday things like traffic loads? I mean, if it takes me 15 minutes to get in because people have been laid off, generally a good thing, right?

Ruhm: That's right, and people drive less. Driving is a risky activity

Ryssdal: Do you have any data on mental health as opposed to physical issues?

Ruhm: A little bit. Mental health is harder to measure and the evidence is much less clear and in fact, it's quite possible that in bad times, people's mental health actually worsens. So, for example, we find that suicides increase when times are bad.

Oh, and mental health isn't at all related to physical health, is it? Oh wait...

Ryssdal: Probably ought to take a step back here and make sure everybody understands we're not talking about individual episodes of good or bad health. It's more on a macro scale.

Well, that may be true, but you've been talking about it like it was individual results and then you try and tell me it's on a macro scale. Make up your mind.

Ruhm: That's right. This is looking at population-wide averages. Essentially what I was doing is using each state as an experiment, so I was comparing what was happening in one state, say in Massachusetts or Texas, relative to what was going on in other states, so if the Texas economy was weakening at a time when other states' economies were strengthening, how were, say, mortality rates in Texas changing relative to other states and the result was just very robust, the result that health got better during bad economic times.

Ryssdal: It's kind of counterintuitive though.

And kind of wrong.

Ruhm: It is to most people and certainly it was not what I initially expected, but there are a number of plausible mechanisms. I might also add there was research over a half a century ago where people looked at mortality rates and found results that were consistent with this and actually couldn't figure out what was going on and after a number of years just sort of ignored their own results, but actually, there's been evidence on this for a long time.

Ryssdal: Chris Ruhm is professor of economics at the University of North Carolina Greensboro. Professor, thanks a lot.

Ruhm: Thank you.

SG: No thank you.

It's Official!

Pause your Tivos, mark your diaries and listen up:

A recession is here.

That's right folks, the majority of economists surveyed believe that the U.S. is in fact, ass deep in a recession. Well, maybe not ass-deep yet.

Never to fear, though, fine fellow-citizens: Samantha Grace is here to translate the Wall Street Journal's saddening news.

"The evidence is now beyond a reasonable doubt," said Scott Anderson of Wells Fargo & Co., who was among the 71% of 51 respondents to say that the economy is now in a recession.

Translated: It's pretty much for sure. Beyond a reasonable doubt=highest burden of proof under the law. Just FYI.

The Commerce Department said Thursday that retail sales tumbled 0.6% in February; sales excluding volatile auto and parts decreased 0.2%. The decline reflected a sharp slowdown in consumer spending, the primary driver of U.S. economic growth, as Americans grapple with high gasoline prices and the credit crunch, as well as drops in home values and other asset prices.

Translated: hoes ain't buying shit because hoes is broke as fuck.

Twenty-nine of 55 respondents said they expect the economy to contract in the current quarter and 25 expect it to do so in the second. The average of all the forecasts is for meager growth -- just 0.1% at an annual rate in the current quarter and 0.4% in the second.

Translated: this ain't goin' away anytime soon.

Although the classic definition of recession is two consecutive quarters of declines in the gross domestic product, Mr. Stanley pointed out that the National Bureau of Economic Research, the nonpartisan organization that is the official arbiter of when recessions begin and end, doesn't necessarily follow that definition. "If you go back to the 2001 recession, there was only one negative GDP quarter, and there might not even be one negative quarter in this recession," he said.

Translated: GWB doesn't have a leg to stand on when he says we don't have a recession on our hands and we're only experiencing a "downturn".

The economists also expressed growing concerns that a 2008 recession could be worse than both the 2001 and 1990-91 downturns. They put the odds of a deeper downturn at an average 48%, up from 39% in the previous survey. Mark Nielson of MacroEcon Global Advisors said that "we recognize the previous two recessions were mild and, if a recession does occur, it is likely to be slightly worse than the previous two."

Translated: we're screwed beyond any screwing that people of my generation can remember. so lube up.

Futures markets Thursday priced in certainty of at least a 0.5 percentage point cut in the Fed's rate target and up to 90% probability of a 0.75 point cut. Officials had, prior to this week, appeared unconvinced a 0.75 point cut was needed, given signs that inflation psychology is worsening. But those views may have been affected by continued upheaval in credit markets and the weak retail sales and employment data. Market participants say this would be a risky time to cut less than investors expect. The Fed will have to weigh the urgency of addressing the continued credit crunch against the risk of appearing unconcerned about inflation.

Translated: Bernake is going to mess it up even more. Too many cooks in the kitchen perhaps?

One thing is clear: The darkening economic outlook has made Ben Bernanke's job less secure, especially with a new president about to enter the White House. The economists gave the Fed chairman just a 59% chance of being reappointed in 2010. "If a Democrat is elected he won't be reappointed, and [presumptive Republican presidential nominee John] McCain may opt for another, too," said David Resler of Nomura Securities. "The problems occurred on his watch," added Ram Bhagavatula of Combinatorics Capital.

Translated: WELL DUH.