Today was a wild financial day - the stock market dropped nearly 400 points, unemployment had its largest jump in 22 years, oil jumped 9% to nearly $140 per barrel, the dollar tanked and corn hit a record high. The White House's response (via the Wall Street Journal's Washington Wire blog) was as expected:
White House spokeswoman Dana Perino said the White House is considering options to address the slowdown, but didn’t offer specifics. At HUD, Bush renewed his calls for an increase in domestic energy production, permanent tax relief, and reform of the regulation of Fannie Mae and Freddie Mac.
“There are a range of things that we continue to look at, but at the moment we would ask Congress to act on the things we think would have an impact — not necessarily an immediate impact, but an impact, nonetheless, so that the future of our economy can continue to grow,” Perino said.
The tax cuts do not expire until the end of 2011, the third year of a McCain or Obama presidency. I want these tax cuts extended as well as the estate tax thresholds increased, but it is silly to think that an extension of the tax cuts would have any immediate economic impact. (How strange that the tax cuts were never made permanent with six years of Republican Congress.) If Bush wants to do something he should put an immediate end to ethanol subsidies and stop the charade of ethanol as a viable fuel alternative. A legitimate strong dollar policy would end the commodity surge and bring the cost of oil down, but it's probably too late for him to do anything effective for the dollar.