Credit or Blame

There is a tendency to measure current economic health, but as the stock markets' recent lunatic pogo-stick ride demonstrates, there is little hope that any average observer-such as myself-will be able to discern except panic and over-reaction.

With any luck, the credit markets will free up as the government begins buying stake in a number of major banks. That is the crux of the recent problems, and one that is far more complex and thus harder for the majority of Americans to understand.

President George W. Bush said in a press conference that voters should not expect a quick resolution, that the solutions in the works will not cure the overall economic malaise, but will (hopefully) avert complete disaster.

Despite Secretary Paulson's "it is a far better thing I do" speech announcing the nationalization of a large chunk of the U.S. banking system (after, that is, having already nationalized several companies, including AGI the behemouth insurance company), the question is will Bush and his adminsitration receive any credit for finally doing the right thing, or will they find little love at all?

The liberal economic commenters who have been calling for just the type of full-scale intervention the administration is now implementing will still take them to task for a.) helping create the situation in the first place and b.) for not stepping in sooner and thus stemming the hemmorage, trillions up in smoke to date.

Conservatives are likely to criticize the decision as socialism. If, in the end, it works, they will likely tie it to the earlier infusions of capital into the markets.

Currently, British Prime Minister Gordon Brown is reaping the credit of a grateful market. Once written off as ineffective and irrelevant, an appendage awaiting the voters final cut, Brown is now lauded as the savior of the international market. Indeed, his announcement of the British capitalization effort bolstered American markets more than the constantly re-shuffled "plan" proffered by the Bush administration.

So, in the end, will Bush's eventual embrace of nationalization be lauded as a smart move? Or will their protestations and foot-dragging expose it for the reluctant (and unwanted) fix that it is.

- Murphy