Today in his press conference, a reporter asked President Bush whether there was a “risk of a recession.” Bush declined to answer, pointing out that he’s never been very good at “Econ 101”:
QUESTION: Do you think there’s a risk of a recession? How do you rate that?
BUSH: You know, you need to talk to economists. I think I got a B in Econ 101. I got an A, however, in keeping taxes low and being fiscally responsible with the people’s money.
Bush is the one who needs to spend a little more time talking to economists. Many of them have been predicting that the administration’s loose regulatory policies may soon lead to a recession:
Former Federal Reserve Chairman Alan Greenspan said the odds of a recession remain ‘somewhat more’ than one in three even after this week’s cut in interest rates, with home prices likely to drop further and hurt consumer spending. [9/20/07]
Yale University economist Robert Shiller, an “economist who has long predicted this decade’s housing market bubble would deflate said the residential real estate downturn could spiral into ‘the most severe since the Great Depression’ and could lead to a recession.” [9/19/07]
CBO Director Peter Orszag notes that “the housing issues and problems in the subprime mortgage markets have created a yellow level of concern. ‘The risk of a recession is clearly elevated,’ he says.” [9/18/07]
As for fiscal responsibility, Bush’s tax cuts have “been the single largest contributor to the reemergence of substantial budget deficits.” “Between 2001 and 2006, the passage of the Bush tax cuts without the offsetting savings have cost $1.2 trillion in lost revenues, or more than 80 percent of the cumulative deficit during this period.”
UPDATE: Michael Roston takes a look back at Bush’s college transcripts. Bush received grades of 71 and 72 in Economics — a grade that “would correspond with a C-.”