EconomicCrisis.US

As the financial crisis of 2008-2009 slowly passes into history, the first round of autopsies is beginning, with congressional committees looking for culprits, and everyone from business leaders to economists to the proverbial man on the street grappling with answers as to what precisely caused the meltdown. It is now almost cliché to speak of how the so-called “Great Recession” nearly brought down the global financial system—how it was the worst crisis since the Great Depression and how the world has changed dramatically as a result. Clichés can be compact truisms, but in this case, what’s most striking about the world isn’t how much things have changed as a result of the crisis but how little.
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During his State of the Union address Wednesday evening, look for President Barack Obama to focus on solutions for the nation’s No. 1 problem: The lack of jobs. Employment growth will determine whether the U.S. economic expansion continues and will likely also determine the fate of Democratic majorities in the House and Senate — and possibly, the Obama presidency itself.

Without question, the failure to pass (barring an unexpected, late coalition-building effort) the health care reform bill represents a major setback for Obama and the Democrats, one that has reduced the president’s political capital. However, the probable health care reform failure would not mean the Democrats are doomed in November, or that Obama’s presidency is over.
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The head of the Dallas Federal Reserve accused the U.S. Congress on Tuesday of seeking to politicise the U.S. central bank and in so doing risking putting the world’s largest economy on the road to ruin.

Richard Fisher, president of the Dallas Fed said in an article in the Wall Street Journal that the attack last week by some in the Senate against the renomination of Fed Chairman Ben Bernanke was an obstacle to economic recovery because it threatened to compromise the Fed’s independence.

“The impulse to use Mr. Bernanke as a political punching bag raises the spectre that, instead of doing the right thing, Congress may seek to pressure the Fed to print its way out of this crisis,” Fisher wrote.
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A little more optimism about the current economic climate sent the U.S. consumer confidence index to a 16-month high in January, according to a survey released Tuesday by the Conference Board.

The consumer confidence index rose to 55.9 in January from an upwardly revised 53.6 in December. It’s the highest reading since September 2008, when the financial crisis intensified. It was the third straight increase.

The index came in better than expected by economists surveyed by MarketWatch, who were looking for an increase to 53.5 from the previously reported December level of 52.9.
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