If my memory serves me well, presidential election years tend to give the nation’s economy heartburn.  Back in 2000 when GWB was running the dot-com bubble was bursting, and even with a national balanced budget, the market was tanking before 9/11. Bush 41 was beaten by Clinton 42 because of the economy, stupid, and Papa Bush’s win in 1988 came just months after the stock market crash of 1987. Of course, who would forget Reagan’s win after Carter’s malaise, and the gas lines, price controls, and turmoil of the Ford and Nixon years. This multi-trillion dollar US economy just doesn’t have the stomach to handle the stress caused by an election.

We indeed are in rare times. The purchase of the entire Bear Stearns business by JP Morgan at a fraction of the value of its building on Wall Street shows how bad this credit crisis is. It was looking bleak when Citibank and other major banks sold large stakes to oil-rich Saudis and other liquid foreign financiers. The stories of people walking away from their homes in droves in cities like Cleveland and Miami have been alarming since the summer. But the last few days were historic in light of the drastic tactics taken by the Fed to try to settle down the acid. After inching up interest rates over the past few years to fight inflation, we are now in a dive, with a full point drop a few weeks ago, and a ¾ point drop today. This should help some in making credit a little more available, but here’s where I have the problem.

Isn’t it sinfully easy credit that got us in the sub-prime mess in the first place? Exotic mortgages, and bottom feeders praying on peoples’ dreams? Home values in the stratosphere with speculators trying to make a quick $100K? The excesses of the housing crisis which has led to a full credit crisis fall right in line with the dot-com bubble, and the savings and loan debacle before it. Meanwhile, a new government bailout seems to always be in the wings.

It seems to me that fundamentals still ring true: credit isn’t a right, it’s a privilege you earn; businesses need to have more income than expenses, make a profit, pay their employees fairly and pay their share of taxes; treat the customer right and they’ll take care of you.

Where the government could really help is in the strengthening of our dollar, and by extension our national pride.  For a while there was talk that our dollar was too strong, and it was hurting exports. I think the goal should be aggressive management of our trading partners while we forge ahead in strength in our economy. Then we might see more stability in the oil prices (a stronger dollar can buy more oil) and other commodities. What ever happens, I hope our presidential candidates have a cure for what ails us!