Bush Needs Help, But Will His Friends Be Able to Deliver? - WSJ's Murray

[question everything]

With his poll numbers plummeting, President Bush could use a little help from his friends -- and two friends in particular: Federal Reserve Chairman Alan Greenspan and Saudi Ambassador Prince Bandar bin Sultan. The White House has been counting on the two Bush buddies to keep interest rates and gasoline prices low for the election. Mr. Greenspan was expected to show gratitude for being reappointed to a fifth term; Prince Bandar was supposed to follow through on promises he made at the outset of the Iraq war. Now, neither seems likely to deliver.

(snip)

Once again, Mr. Greenspan is blazing his own trail. He's already signaled to financial markets that he will raise interest rates this summer. If he fails to follow through -- or if the White House even hints at replacing him -- markets will respond with an even more punishing reaction.

Meanwhile, Prince Bandar's ability to keep oil prices below $30 a barrel is shot. Oil prices have soared to record highs recently -- not adjusted for inflation -- with U.S. light crude approaching $42 a barrel... Conceivably, the president could pressure the prince by cutting off his easy access to the White House -- which appears to be on a par with that of the Bush twins. But such pressure is unlikely to do much good. "This is a market in which the risks are on the upside," Mr. Yergin says. Fifty-dollar-a-barrel oil may be more likely than $30 oil.

(snip)


The problem for the president, however, is that while the economy is clearly on the rebound, many Americans aren't feeling the effects. The latest Wall Street Journal-NBC News poll showed the number of voters who felt "things in the nation are generally headed in the right direction" fell to 33% in May from 43% in March. Approval of the president's handling of the economy fell to its lowest level on record: 41%. Events in Iraq have added to that discomfort -- depressing consumer confidence, pushing oil prices and interest rates higher, and causing the stock market to fall. None of this is likely to stall the economy's now robust rebound. Still, it may keep voters from fully appreciating that rebound by Election Day.

Write to Alan Murray at [email protected]

URL for this article:
http://online.wsj.com/article/0,,SB108482840380013744,00.html

[cliss]

1. Nice article. I would tend to agree, except for

Ole Buddy Prince Bandar. I believe the plan was that he was going to raise prices before the summer driving season. That way, people would get hit hard and do lots of complaining during the summer. Then in October, right before the election, Prince Charming would come riding up on his trusty steed and lower prices right before the election!! Voila. To the rescue.

Now as far as Greenslime is concerned, he really doesn't have a choice. We know that prices are moving upward. Inflation is creeping up, at a surprising rate considering how many people are still unemployed. There have been threats for a long time that the interest rate needs to move upward. So he really has no choice in the matter, friend or no friend.

As far as "friendship" is concerned: when you have a "friend" like Bush, what do you expect?

[Eric J in MN]

2. Wouldn't Greenspan prefer inflation to raising rates before November? nt

nt