DE-stagflation is inflation with low interest rates. The Fed is already committed to this path, to avoid DE-stagflation they would have to start raising rates. Some people think the market will do this, or market forces will do this, but they underestimate the power of the NEW Federal Reserve.

Since the Federal Reserve waived most of the reserve requirements for banks, they have gained incredible leverage to force those banks to play by their rules.

The rules are not the same for everybody, the FED has the power to open the books on any bank, and suggest they add to their reserves. If the plan is to force banks to lend at the Fed fund target rate, they can achieve that through coercion.

In the 90's the Japanese banking systen was routinely bashed, for carrying bad paper. Americans called it 'crony capitalism'. George Bush is the king of Crony Capitalists, beginning with his Halliburton friends. Banks with bad paper will be allowed to carry that paper, if they hold the Fed line on interest rates.

China is already in DE-stagflation, technically anyway, because their inflation rate is above their Bank Target Rate. Again nothing has to change, we are already there. Inflation in this country is probably around 8%. DE-stagflation is preferable to plain stagflation, because the sheer size of the numbers destroys economic confidence. While a real inflation rate of 5% is 60% higher than a fed funds rate of 3%, it only looks like 2% to you and me. Plain Stagflation would be preferable to what we have.

Never in a healthy economy should the rate of inflation exceed the return on a fixed income investment, but there you have it.

While Bush says everything is fine, and warns against overcorrection, (and gawd help regulations against this sort of thing) his associates are pulling out all the stops, overcorrecting, throwing money with ham handed reckless endeavor. The credibility gap has finally caught up with another Texas President.

Clinton is merely doing what candidates who have broad support always do, they abandon their core constituents and try to reach across party lines to attract those all important swing voters. I have no doubt that the racial comments in North Carolina, where she was going to lose anyway, were meant to pander to those Republicans who might cross to vote against Obama.There is no moral high ground here. Perhaps some of you recall the article about her dustup with Russ Feingold over soft money. Guess which side she was on?

HC is a professional politician, completely amoral, and opportunistic. (Her deal with the cattle futures with as least as bad as Martha's insider trading deal, but no camp cupcake for her)

Interesting that Pelosi threw in with Obama, I thought the Femocrats moved together. (Oh oh, is that a sexist remark? Well I wasn't going back to DKOS anyway) Pelosi's tenure as Speaker has been a complete disappointment, but Markos and his bunch put the Democrats in power in the midterm elections, and that is no hyperbole, the grassroots players turned the tide in several key races.

They have to be wondering what they did wrong. The promises that they would stop our Constitution bashing President, unfund his illegal war, and put some PayGo limits on spending, have all gone down the drain. It's hard to decide who has fallen farther from grace. I have been a Dem for forty years, but I am going third party the rest of the way.

The bulge in credit expansion happened mostly during the Bush tenure. W spent a week interviewing Bernanke before he offered up his appointment. The Democrats didn't seem to have any problem with that, or any other Bush nominee, that made it through their vetting process.

The Dems promised PayGo, and to defund the war in Iraq, but did neither.

Quite simply there were a lot of ways the economy could have been improved with a diversion of funds.

Bush got caught with his hand in the cookie jar in the Dubai port deal, a quid pro quo which would have allowed the UAE port ownership, in exchange for US military posts guarding the straits of Hormuz. It was the linchpin in the war against Iran.

Paulson used his influence at GS to rejigger the commodity index in the spring of 2004, which drove gasoline prices lower, in an attempt to influence the midterm elections.

The SPR was probably also manipulated to bring crude oil prices down, which it now seems were absurdly low at the time.

The Bush admninistration has always talked a strong dollar and done nothing to support the currency.

Like everything else the level of mendacity is stultifying. It is quite generally acknowledged that the level of information from the BLS, and the way economic figures are calculated in the CPI are so disingenuous as to be laughable.

The next President has the opportunity to clean up the woodshed, and expose the Bush administration for what it was, a gang of liars and thieves.

The only way forward rests with a decent honest accounting of economic figures, a true estimate of the cost of the war in Iraq, and the bottom line on the Bush debacle.