It's Halloween in February

Meaning I'm scared. I thought things were bad with the economy and our creaking financial system last fall before the election, but I began to feel a little better in the months since.

But reading the New York Times today has me mighty worried:

• U.S. companies continue to wither on the vine, with the prospect of more bailout billions growing by the day. Citigroup needs so much money that the U.S. may soon own 40% of it.
• Europe has its own subprime crisis: it's called "Eastern Europe." Apparently European (and U.S.) banks let billions to Poland, Hungary, and neighboring countries when times were flush. Now their currencies have fallen 20, 30, or 40% against the euro, making re-payment extremely difficult.
• Paul Krugman continues to argue for temporarily nationalizing U.S. banks that become insolvent, and I'm beginning to think he may be right.

And all of this on a day when the Dow fell back to where it was in 1997. It's now down 50% since it's peak 16 months ago.

Earlier today I watched Obama talk about our longer term financial issues with legislators from both parties as well as other invited experts, and I had a lot of faith that he may have what it takes to actually break the logjam that's come to characterize Washington. I'm less sure about the short term... we've got some major challenges, and the next five (ten?) years may be really difficult ones for America.

Here's the full transcript of today's post-summit Q&A, including this exchange between Senator McCain and President Obama:

"We all know how large the defense budget is," Sen. McCain said. "We all know that the cost overruns -- your helicopter is now going to cost as much as Air Force One. I don't think that there's any more graphic demonstration of how good ideas have cost taxpayers an enormous amount of money...[W]e have to make some tough decisions -- you, Mr. President, have to make some tough decisions about not only what we procure, but how we procure it."

"The helicopter I have now seems perfectly adequate to me. Of course, I've never and a helicopter before -- maybe I've been deprived and I didn't know it," the President joked, before continuing with a more serious response. "But I think it is an example of the procurement process gone amuck. And we're going to have to fix it....One of the promising things is I think Secretary Gates shares our concern and he recognizes that simply adding more and more does not necessarily mean better and better, or safer and more secure."

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One thing I appreciated about Obama today was how at ease he looked and sounded interacting with the decision makers gathered at the White House, both those who agree with him on most issues and those who don't.

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Still... I'm uneasy. :-/