Who Would Even Want to Be President?

Now that the election is over, it’s time for President-Elect Barack Obama to tackle one of the worst financial crises since the Great Depression. In it’s latest issue, The Economist had a great graphic (see below) of other critical Presidential transitions.

The same article also sums up our current situation as follows:

Even if the worst of the financial crisis has passed (a dangerous assumption), the worst for the economy is almost certainly ahead. After their near-death experience, bankers have turned exceedingly cautious. A Fed survey released this week shows them tightening lending standards to consumers by a greater margin than at any time in the survey’s 40-year history, except for Mr Carter’s short-lived imposition of credit controls.

The depth of the recession largely hinges on how long it takes for banks and private lenders to recover their appetite for risk. This, in turn depends on the course of home prices, loan losses and the ability of financial firms to raise capital. Some officials at the Fed think that the recession could be as mild as it was in 1990-91. If so, it would probably be over around mid-2009 and unemployment will peak somewhere near 7%. In a more pessimistic scenario, the recession would rival that of 1981-82, lasting into late 2009 with unemployment reaching 8-9%.