New York Times/Fox Crashed-and-Burned Watch (Judith Miller Edition)
Come Back to Stanford, Eddie Lazear!

Plan G: Pulling the Keynesian Fire Alarm

Krishna Guha in the FT:

Bernanke backs fresh US stimulus package: Ben Bernanke on Monday backed a second fiscal stimulus, while the White House indicated that President George W. Bush was “open to the idea,” raising the possibility that a stimulus package could be signed into law before a new president takes office.

The Federal Reserve chairman told the House budget committee: “With the economy likely to be weak for several quarters, and with some risk of a protracted slowdown, consideration of a fiscal package by Congress at this juncture seems appropriate”...

Mr Bernanke’s comments... came in testimony in which he said the US economy was in the midst of a “serious slowdown”. He warned that the economy would be weak for several quarters and the “uncertainty over the economic outlook is unusually large”. The timing of recovery would “depend greatly on the pace at which financial and credit markets return to more normal functioning”.... The endorsement of a second fiscal stimulus marks a shift by the Fed chief, who opposed plans for such a boost in the summer. It follows the sudden deterioration in the US economy in recent weeks...

And, of course, George W. Bush demonstrates why everybody who ever voted for him should hide their heads in shame, donate all their money to the poor, and move to the upper Amazon to take up a life of anonymous service to the global poor:

Meanwhile, White House press secretary Dana Perino told reporters that Mr Bush was open-minded about a second stimulus. However, Ms Perino said Democratic leaders in Congress had floated ideas – such as infrastructure spending and help for state and local governments – that “we did not think would actually stimulate the economy, so we would want to take a look at anything very carefully”.