TW: The economy is in deep trouble. The implementation of TARP is off to a dubious start. Bush as usual appears feckless, we only have one POTUS at a time. But with the economy in a freefall is there time to wait until Jan 20th, 2009 for aggressive, profound and most of all lets hope effective policy initiatives. After all it will take time once Obama gets into office for not only the initiatives to be enacted but for them to gain actual traction within the economy. Two months is a very long time in the face of an economic abyss.
From Economist:
"We expected some nasty numbers after the financial shocks of September and October. I think we also expected that to galvanise the government into appropriate action. The Bush administration, quite clearly, has not been shy about handing money over to financial companies. On the other hand, it continues to greet with scepticism any stimulus plan over $200 billion or containing much besides tax rebates. It walked back a potential new mortgage assistance deal, proposing a plan far more conservative than had originally been envisioned. In the execution of the TARP, Treasury has not exercised its authority as broadly as possible, which has allowed banks to sit on their cash. And Mr Bush, after calling for a global financial summit, pre-emptively announced that it wouldn't support much in the way of international cooperation on new financial rules.
January is a long way away. Two full months more of excess and unwarranted caution, or of Treasury bungling, could cost us dearly, turning three quarters of contraction into five, and an 8% unemployment rate into 10%. If there's a political instability threshold out there in large emerging markets, those two lost months could mean the difference in hitting it and missing it. That's the big downside risk, in my opinion. And that's why 20 January can't get here fast enough for my taste."
http://www.economist.com/blogs/freeexchange/2008/11/is_this_getting_depressing.cfm
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