Captain Barack of the S.S. Carpathia

So Bush has 68 days left; does the United States?  This is pretty excruciating to watch, the clock ticking down on an utterly failed presidency while the stock market continues to tank, the auto industry verges on collapse and the same clown troupe presides over the bankrutpcy of the federal government.  "President" Bush seems as oblivious as ever.  I guess he honestly doesn't notice that anything whatsoever is wrong anywhere.  Everything is fine; c'mon in, Barack, let's sit in the Oval Office and talk shop.  There is so much you need to learn from me.

The sales of General Motors are down 45% this year compared to last.  Its stock capitalization is now 4% of the value of Toyota.  During the Eisenhower era, the saying was that "as General Motors goes, so goes the nation."  This is about exactly right; the Dow Jones is at 8,400 currently, versus a high of 14,000.  Let's go to the chalk board and figure that one out. Wow, wouldn't you know it?  That's a 40% drop.  Ike was right!  

And here's a video of some wise guy with a foreign accent uttering the unthinkable:

"The United States may be on course to lose its 'AAA' rating due to the large amount of debt it has accumulated, according to Martin Hennecke, senior manager of private clients at Tyche.

"The U.S. might really have to look at a default on the bankruptcy reorganization of the present financial system" and the bankruptcy of the government is not out of the realm of possibility, Hennecke said.

"In the United States there is already a funding crisis, and they will have to sell a lot more bonds next year to fund the bailout packages that have already been signed off," Hennecke told CNBC."

You'll notice that the disputatious guy with a different foreign accent takes issue with the doomsayer by trotting out the usual bromides; the US prints the world's reserve currency, it has an infinitely elastic capacity to raise money through taxation, etc.  Then, sensing that's not enough, he throws in everything else: the USA is "innovative," and resilient, and, and.....IT'S GOING TO BE OKAY, DAMMIT!  

Things are not getting better fast.  Of course, as Mr. Hennecke points out, we have a lot of company around the world.  Maybe the World Trade Organization could be rechristened the DTO, the Deadbeat Trade Outfit.  Instead of Triple A ratings, we could simplify to three new ratings: A: We'll probably have something for you later in the week. B: Things are a little tight right now.  C: The check's in the mail.

68 days to go.  Bush can do a lot of damage in 68 days.  He has no peer in the modern world when it comes to wreaking havoc.  Sure, it looks easy to take the national debt from $5 trillion to $10 trillion in only eight years, but that's just because you've never tried it.  And the stock market? Where should the Dow actually be at this point?  Let's say, to be generous, that Bush began at about 10,000.  Let's compute a rate of return of 7% on that level for 8 years and see what we get, shall we?  

There's your basic formula.  This innocent looking equation is not very kind to Mr. Bush; you see, 7% is actually a pretty reasonable estimate of bull market returns back in the good old days.  Future value = present value times the sum of 1 plus .07 multiplied by itself 8 times.  Which equals 17,181. We've come this far; let's check the current value as a fraction against this fantasy result had we been governed by a real president: 8,400/17,181 = 49%.  That again seems about right; about 49% of the electorate voted for George W. Bush in 2000.  How's that working for you?

I suppose the rest of the ghoulish games that might be played between now and January 20, 2009 include over/under guesses on the unemployment rate (official version).  We're at 6.5%  I'm confident George can get it to 7.5%.  If GM goes, the ripple effect would get us to 10% all by itself. How about a guess as to the federal deficit for the fiscal year ending September 30, 2009?  Anyone doubt that George W. Bush will smash all records, maybe by a factor of 3?  If you doubt it, you just don't have the kind of faith in our boy that I do.

Perhaps this is a little like the situation in 1912.  Barack Obama is the captain of the Carpathia. He hears the distress calls of the Titanic.  He's steaming in the direction of the doomed ship, but it's breaking in half and going down.  The survivors in the life boats are looking frantically for their loved ones in the icy waters.  By the time the rescue ship can reach the scene, a deathly silence prevails over the black sea.