MORE PROOF IT AIN'T BUSH'S FAULT: FRANCE AND IRELAND IN RECESSION; WORLD ECONOMY SLOWING

IHT:

France has entered a recession, with economic contraction expected in the third and fourth quarters of 2008, the country's national statistics agency said Friday.

The Insee statistics agency said it expects the economy to shrink by 0.1 percent in both the third and fourth quarters.

Following on a 0.3 percent fall in the second quarter, that would bring growth down to 0.9 percent for 2008.

Insee said its forecasts, which are based on the premise that the current financial crisis does not worsen, also expect unemployment to rise to 7.4 percent by the end of the year, from 7.2 percent in the third quarter

The projections have sparked a debate over the definition of recession, which economists generally define as two consecutive quarters of falling gross domestic product. Government officials have been quick to insist France is experiencing very slow growth but is not in a true recession because growth for the year is still expected to be positive and is close to the government's projection of 1 percent growth for the year.

WHY ARE BOTH EUROPE'S AND AMERICA'S ECONOMIES SLOWING? EUROPE CANNOT BE SLOWING BECAUSE OF BUSH POLICIES.

IT'S REALLY TWO-FOLD:

1. IT'S BUT BECAUSE CENTRAL BANKS MADE AND KEPT MONEY TO TIGHTLY AND TOO EXPENSIVE FOR TOO LONG,
2. AND BECAUSE OF THE PRICE OF OIL.

IT WAS NOT BUSH TAX CUTS OR USA DEFICITS (WHICH ARE NOT HISTORICALLY HIGH AS A % OF GDP!).

THE ROOT CAUSES WERE HIGH CENTRAL BANKS RATES AND OIL.

GREENSPAN KEPT RAISING RATES THE LAST TWO YEARS HE WAS FED CHAIRMAN, AND THE ECB KEPT THEIR RATES HIGH.

HERE'S A CHART OF THE FED FUNDS RATE - LOOK AT IT FROM 2004 TO 2006 -- THIS IS ONE REASON WHY THE ECONOMY SLOWED:


HERE'S THE OIL CHART; NOTE WHAT HAS HAPPENED SINCE 2004:


AND HERE, LOOK AT WHAT THE ECB DID: THEY KEPT THE RATE HIGH, UNTIL.... THEY RAISED IT WHEN THEY SHOULD HAVE LOWERED IT!

AT THE TIME SARKOZY SAID THIS WAS THE WRONG THING, AND THAT THE ECB SHOULD HAVE LOWERED RATES. SARKO WAS CORRECT!

• THESE TWO FACTORS - (THE HIGH COST OF MONEY AND HIGH COST OF ENERGY) SLOWED US DOWN AND BURST THE LENDING/REAL ESTATE BUBBLE. PEOPLE HAD THEIR MORTGAGES GO UP AND THE CREDIT CARD EXPENSES GO UP AND THEIR ENERGY EXPENSES GO UP. SO THEY CUT BACK WHERE THEY COULD, AND THIS IS HOW WE GOT HERE.
  

• TIGHTER CONTROL OF FANNIE MAE - WHICH BUSH AND MCCAIN FAVORED BUT WHICH THE DEMOCRATS IN CONGRESS BLOCKED - WOULD HAVE LIMITED OUR FINANCIAL SYSTEM'S EXPOSURE.

• FOR YEARS THE DEMOCRATS HAVE PREVENTED ENERGY EXPLORATION AND EXPLOITATION IN THE USA, AND THE PROLIFERATION OF CLEAN COAL PLANTS AND NUCLEAR POWER PLANTS. THIS ANTI-ENERGY SUPPLY EXPANSION POLICY IS WHY WE PAY TOO MUCH - AND WHY FOREIGNERS HAVE GOTTEN RICH OFF OF US.
  

• IF VOTERS ARE SMART ENOUGH, THEN THEY WILL NOT BE DUPED, AND THEY WILL PUNISH THE PARTY MOST RESPONSIBLE FOR OUR MESS: THE DEMOCRATS.