what's hussein hiding and why?


---------------wall street jrnl news snip----------------------
As 2009 opened, three weeks before Barack Obama took office, the Dow
Jones Industrial Average closed at 9034 on January 2, its highest
level since the autumn panic. Yesterday the Dow fell another 4.24% to
6763, for an overall decline of 25% in two months and to its lowest
level since 1997. The dismaying message here is that President Obama's
policies have become part of the economy's problem.

Americans have welcomed the Obama era in the same spirit of hope the
President campaigned on. But after five weeks in office, it's become
clear that Mr. Obama's policies are slowing, if not stopping, what
would otherwise be the normal process of economic recovery. From
punishing business to squandering scarce national public resources,
Team Obama is creating more uncertainty and less confidence -- and
thus a longer period of recession or subpar growth.

The Democrats who now run Washington don't want to hear this, because
they benefit from blaming all bad economic news on President Bush. And
Mr. Obama has inherited an unusual recession deepened by credit
problems, both of which will take time to climb out of. But it's also
true that the economy has fallen far enough, and long enough, that
much of the excess that led to recession is being worked off. Already
15 months old, the current recession will soon match the average
length -- and average job loss -- of the last three postwar downturns.
What goes down will come up -- unless destructive policies interfere
with the sources of potential recovery.

And those sources have been forming for some time. The price of oil
and other commodities have fallen by two-thirds since their 2008
summer peak, which has the effect of a major tax cut. The world is
awash in liquidity, thanks to monetary ease by the Federal Reserve and
other central banks. Monetary policy operates with a lag, but last
year's easing will eventually stir economic activity.

Housing prices have fallen 27% from their Case-Shiller peak, or some
two-thirds of the way back to their historical trend. While still
high, credit spreads are far from their peaks during the panic, and
corporate borrowers are again able to tap the credit markets. As
equities were signaling with their late 2008 rally and January top,
growth should under normal circumstances begin to appear in the second
half of this year.

So what has happened in the last two months? The economy has received
no great new outside shock. Exchange rates and other prices have been
stable, and there are no security crises of note. The reality of a
sharp recession has been known and built into stock prices since last
year's fourth quarter.

What is new is the unveiling of Mr. Obama's agenda and his approach to
governance. Every new President has a finite stock of capital --
financial and political -- to deploy, and amid recession Mr. Obama has
more than most. But one negative revelation has been the way he has
chosen to spend his scarce resources on income transfers rather than
growth promotion. Most of his "stimulus" spending was devoted to
social programs, rather than public works, and nearly all of the tax
cuts were devoted to income maintenance rather than to improving
incentives to work or invest.

His Treasury has been making a similar mistake with its financial
bailout plans. The banking system needs to work through its losses,
and one necessary use of public capital is to assist in burning down
those bad assets as fast as possible. Yet most of Team Obama's
ministrations so far have gone toward triage and life support, rather
than repair and recovery.

AIG yesterday received its fourth "rescue," including $70 billion in
Troubled Asset Relief Program cash, without any clear business
direction. (See here.) Citigroup's restructuring last week added not a
dollar of new capital, and also no clear direction. Perhaps the
imminent Treasury "stress tests" will clear the decks, but until they
do the banks are all living in fear of becoming the next AIG. All of
this squanders public money that could better go toward burning down
bank debt.

The market has notably plunged since Mr. Obama introduced his budget
last week, and that should be no surprise. The document was a
declaration of hostility toward capitalists across the economy. Health-
care stocks have dived on fears of new government mandates and price
controls. Private lenders to students have been told they're no longer
wanted. Anyone who uses carbon energy has been warned to expect a huge
tax increase from cap and trade. And every risk-taker and investor now
knows that another tax increase will slam the economy in 2011, unless
Mr. Obama lets Speaker Nancy Pelosi impose one even earlier.

Meanwhile, Congress demands more bank lending even as it assails
lenders and threatens to let judges rewrite mortgage contracts. The
powers in Congress -- unrebuked by Mr. Obama -- are ridiculing and
punishing the very capitalists who are essential to a sustainable
recovery. The result has been a capital strike, and the return of the
fear from last year that we could face a far deeper downturn. This is
no way to nurture a wounded economy back to health.

Listening to Mr. Obama and his chief of staff, Rahm Emanuel, on the
weekend, we couldn't help but wonder if they appreciate any of this.
They seem preoccupied with going to the barricades against Republicans
who wield little power, or picking a fight with Rush Limbaugh, as if
this is the kind of economic leadership Americans want.

Perhaps they're reading the polls and figure they have two or three
years before voters stop blaming Republicans and Mr. Bush for the
economy. Even if that's right in the long run, in the meantime their
assault on business and investors is delaying a recovery and ensuring
that the expansion will be weaker than it should be when it finally
does arrive