off the contents of their homes. In these areas, unemployment is nine per cent versus the national average of six per cent.

In the suburbs of Cleveland, foreclosure rates are so high that some streets are now all but abandoned. Those residents who remain have found themselves cut off from city water and sewer services, and surrounded by squatters moving into the empty properties.

Even recent boom towns such as Seattle are feeling the pressure. Microsoft, one of the city's biggest employers, just announced it was re-evaluating its hiring policies in the light of the struggling economy. The collapse of Washington Mutual, one of the country's largest banks, will cause thousands of job losses in the city.

In Silicon Valley, California, the most important venture capital firms have been telling their portfolio companies to cut spending and hoard their cash for a long period of financial famine. Sequoia, which made its billions from firms like Google and Oracle, began a presentation to its companies last week with an image of

a tombstone with the words: 'RIP Good Times'. The state of California has even had to beg the federal government for $7bn just to pay its employees, since its usual credit facilities have broken down.

Any stock-market optimist who chooses to read too much into the gyrations of the Dow Jones Index would do well to keep their eye on some more 'real economy' facts. American consumers collectively owe $2.5tr on their credit cards, car payments and similar loans. Their borrowing has outstripped the rate of inflation by four times over the past 15 years.

Five million adjustable rate mortgages are due to be reset over the coming year, which will add to the pain for the millions already struggling to meet their monthly payments. New home sales are at their lowest in 17 years. Many towns will be unable to pay their bills as property tax receipts plummet.

It is all deeply unpleasant stuff and will take far more than Bush's decision to purchase stakes in the banks, or a good day or two on the stock market, to change.