Bush’s Approval Rating Drops to New Low of 27% against the backdrop on bailout failure.

In the wake of yesterday’s congressional meltdown over the bailout bill, President Bush gave a speech this morning, meant to reassure the public and the volatile financial markets. The address expressed disappointment in Congress and warned that “the consequences will grow worse each day if we do not act.”

The Bush Administration and Secretary Paulson have fallen into a trap of their own making. They have made it clear to everyone that the financial system is doomed, that all their past bailout operations have failed, and that only a massive injection of taxpayer cash into the financial system will stop it from collapsing completely. Paulson initially demanded that he be given the power to do whatever he saw fit, with no interference from the courts or other government agencies. Meanwhile, a number of other important developments have occurred. Wachovia, the fourth-largest bank in the U.S., effectively failed this morning, when the FDIC arranged an assisted takeover by Citigroup. Citigroup is buying the banking functions, including deposits, of Wachovia, and making Citigroup the largest bank in the U.S. by deposits. As with the failure of Washington Mutual late last week, the deal was structured in a way which avoided the FDIC's having to take over and run the bank, and immediately eat the losses, something the FDIC has neither the manpower nor the funds to do.

Banks are also failing in Europe, where the Belgian, Dutch and Luxembourg governments announced a partial nationalization of Fortis, a trillion-dollar Belgian-Dutch bank, the British government has seized Bradford & Bingley, and Iceland seized Glitnir.

Coinciding with these developments, Gallup has released a new poll today showing that Bush’s approval rating has dropped to the lowest point in his tenure:



Bush's approval rating has declined from 31% in the previous Gallup Poll, conducted before the crisis intensified with the bankruptcy of Lehman Brothers, the near-collapse of Merrill Lynch, and the federal government bailout of AIG. It is down 6 points from 33% just after the Republican National Convention early this month. Bush's previous low had been 28%, measured at several points earlier this year.


Text taken partially from here and here.