The Economy By Andrew Clark

Some two million Americans have lost their jobs, the stock market has suffered a slow-motion crash, Wall Street banks are losing billions and Detroit's motor industry is in intensive care. A financial crisis with its roots in the US has spread to engulf much of the world.

George Bush's report card on economic issues makes for grim reading. The first White House occupant to hold an MBA, he was supposed to be a "CEO president". Yet Bush never convincingly spoke the language of commerce.

"Wall Street got drunk," he quipped at a political fundraiser in Houston last summer. "The question is - how long will it take to sober up and not try to do all these fancy financial instruments?"

During his first term, Bush presided over a period of relative economic stability. There were glitches - the collapse of Enron and WorldCom and the evaporation of the first internet boom - but they pale compared with what followed.

The credit crunch, which began in the summer of 2007, had its roots in unsustainable mortgage lending but spread with terrifying speed. Banks began foreclosure proceedings on 2.25m homes last year, the Dow Jones industrial average slumped 33.8% and the Federal Reserve lowered interest rates to near zero.

Two Wall Street institutions - Bear Stearns and Lehman Brothers - bit the dust and at one point in autumn of 2008, a collapse of the US banking system appeared a genuine possibility.

But how much blame should be shouldered by the occupant of the Oval Office? After all, a similar fiasco hit Britain but Gordon Brown emerged reinvigorated and newly popular.

Hindsight is a wonderful thing. But economists blame Bush for a lethal combination of light-touch regulation, an exaggerated encouragement of home ownership and a reluctance to confront a property price bubble.

"It's pretty hard to look at the economy and say it's anything but bleak," said Dean Baker, co-director of the Center for Economic and Policy Research in Washington. "This guy's been sitting there for eight years. He can't escape responsibility."

While his father was renowned for prudence and caution, Bush Jr adopted an aggressively neoliberal economic policy. Better-off Americans got more than $1.6 trillion in tax cuts. In a 2003 stunt now tinged with irony, federal agencies took a chainsaw to 9,000 pages of banking regulations. Bush's choice to police Wall Street was a former Republican congressman and devout free marketeer, Christopher Cox. His Securities and Exchange Commission's reluctant regulation failed to spot Bernard Madoff's $50bn fraud.

Those sympathetic to Bush say there have been successes. Luke Froeb, professor of management at Vanderbilt University in Nashville, said: "Bush has been very skillful about proceeding with his free trade agenda through bilateral deals around the world."

Others are frustrated by the failure to tackle welfare spending which they view as a time bomb.

In his final months, Bush felt obliged to approve bail-outs for AIG, General Motors, Chrysler and scores of financial institutions. His former advisers admit that the looming threat of a credit meltdown had eluded them.

"There is no question we did not recognise the severity of the problems," Al Hubbard, chief economics adviser to the White House until 2007, told the New York Times.

For the incoming president, keeping the US afloat is a challenge. Barack Obama is planning a $775bn economic recovery package but warns of "trillion dollar deficits" for years to come.