Orange County Register

President Bush this morning tried to reassure us that the government really has a handle on this financial crisis thingie and contended that it’s widespread anxiety feeding the market instability (though I guess you could argue that it isn’t really unstable, it just keeps going down every time a government official tries to reassure us, which is a pretty stable pattern).

But who is really feeding the anxiety? When I talked to Lee Ohanian, the international econ prof at UCLA yesterday, he pointed out that the fundamentals of the economy are pretty much what they were six weeks ago, though unemployment is up a notch or two. The sky didn’t start to fall until Paulsen and Bernanke started going on the tube to tell us the sky was falling, that they needed unprecedented power, and then started doing something new almost every day, subverting any notion that they might actually have a coherent plan. I think the crisis has been inordinately magnified by government officials assuring us they are dealing with it.

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