Here is a tip – if you really want to confuse your young child, send them mixed signals. 

Every time I listen to members of the current administration speaking about the states of the economy, I feel like that young, confused child receiving mixed signals from his parents.  Case in point, look what Federal Reserve chairman Bernanke and President Bush were quoted as saying Monday about the current economic situation…

Bernanke

“Well, you hear a lot of loose talk, but let me just … say, as a scholar of the Great Depression — and I’ve written books about the Depression and been very interested in this since I was in graduate school, there’s no comparison,” 

Bush

“I can remember sitting in the Roosevelt Room with Hank Paulson and Ben Bernanke and others, and they said to me that if we don’t act boldly, Mr. President, we could be in a depression greater than the Great Depression,”

President Bush was recalling a conversation between himself, Bernanke and Treasury Secretary Henry Paulson only weeks ago.  During the last two months only negative information has hit the market – housing starts at lows, unemployment rising, credit still unavailable, Citi Group needed Government assistance – so what changed and which is it.  

Is the United States simply in a long, deep recession or is the Nation facing a “depression greater than the Great Depression”

I am not a believe of conspiracy theories, and I have no intent on being cynical, but it almost appears Bernanke and Paulson are giving the “real” information to Bush and trying to keep the public calm by saying “there is nothing to worry about, pay no attention to the man behind the curtain”.  Actually, the ones who are really getting the correct signals are those pulling money out of hedge funds but it even looks like they are starting to have problems getting their money.

Economic information aside, if the administration wants to make public perception of the economic situation any worse, continue to send mixed signals. 

Oh – and for the record – I think Bernanke is right, this has no major comparison to the Great Depression of 1929.  To me it smacks of, and has a direct comparison to, the Long Depression of 1873.

Related posts:

1. Yet another reminder that uncertainty creates fear – Two Topic U.S. economic advisers contradict President Obama on “world currency”
2. Uncertainty Creates Fear
3. Take a look at the past four bear markets
4. Bernanke, Paulson shut your mouths!
5. What can be said on the economy that hasn’t been said already?