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Greg

The current financial crisis is result of 30 years of failed Republican policies. As the saying goes:

"You can put lipstick on a pig, but it is still a pig"

No matter how much you try and shift the blame to other people, and sections of America, this is the results of the failed policies you have been pushing for the entire Bush Administration. These have been the reasons why you have voted Republican. As the economy comes under greater and greater stress from the collapse of the home mortgage bubble, the political party in charge, in this case the Republicans, can no longer to distort the numbers to paint a picture of a fundamentally sound economy.

Guess what? That day came, mark the date Sept 24, 2008, the statistical house of cards is collapsing. No longer can the administration or its enablers tout a strong economic base, low inflation, low unemployment and the other "facts" cited as recently as last week by one John McCain. The American people aren't buying it anymore. They can look at any neighborhood, any city or town and see the truth all around them. Foreclosure signs, closed businesses...and most importantly, fear.

In March when the crisis was well underway, President Bush proudly proclaimed that

“Americans can be confident about our economic growth.”

He went on to give the usual litany of benchmarks of his success, low inflation, low unemployment and good economic growth. For those reasons Bush said he was optimistic because the economy’s “foundation is solid” as measured by employment, wages, productivity, exports and amazingly, the federal deficit. For several months after that speech, Paulson, Bush, McCain , Fox News, yourself, and others touted the economic talking points, the statistical fictions about the American economy. In each case there was no mention of the impending disaster that now confronts us.

As noted by the Wall Street Journal about t Bush's speech in March:

Uh...recession...naw...its a surge of negative growth?

“He was wrong on every count. On some, he has been wrong for quite a while.”

The New York Times went further:

“Mr. Bush went on to paint a false picture of the economy. He dismissed virtually every proposal Congress is working on to alleviate the mortgage crisis, sticking to his administration’s inadequate ideas."

Why would he do that? In March, with the all the serious problems, stagnant credit markets, billions in impending mortgage defaults, bank solvency issues, a collapsing dollar one would think that a little truth telling and soul searching would be in order. No, rather Bush said that a major source of uncertainty today was not liquidity, not oil prices and not the mortgage crisis, no… in his view it is whether his tax cuts, scheduled to expire in 2010, would be extended.

Last night George Bush stood before the American people and admitted that the 8 years of his management and not inconsequentially, 27 years of supply side mayhem instigated by Ronald Reagan and his devotees was a failure. Let me state the obvious:

The market is not functioning properly. There has been a widespread loss of confidence, and major sectors of America's financial system are at risk of shutting down.

Why is this important? Because the Paulson/Bush Bailout Plan depends on, as a minimum 700 billion in treasury securities...security's impacted by inflation the number most feared by Washington and the most manipulated. Inflation impacts interest rates, the measurement of economic growth and ultimately the unemployment rate. The artificially low rates in conjunction with the Bush laissez-faire oversight of the finacial markets are largely believed to be responsible for this mess in the first place.

It should be no surprise then, and it has been politically advantageous to understate inflation. The Bush administration has been doing it since they took office. Not only does it inflate growth statistics, it keeps interest rates artificially low. Low interest rates was the critical component in building the housing bubble. Additionally, Wall Street and the rich benefit from perpetuating the perception of stability. They got richer hiding under this statistical camouflage, particularly in the area of inflation. They leveraged the low rates into, an unknowable mountain of mortgage paper, skimming off their profits as they went.

So we must ask ourselves where are we really? The actual inflation rate is as high as 7% or even 10%, unemployment near 9% as high as 12% in some states. Economic growth since the recession of 2001 has been mediocre at best, despite the surge in wealth and incomes of the super rich largely due to tax cuts, we are now falling back into, or well into recession. We will see with the next round of quarterly "adjustments."

So who really profits from the Republican, low-growth, U.S. economy hidden under statistical camouflage and the bubbles it generates? No surprise, it has been the lobbyists and the business elites. They are anxious to mislead voters with trumped up "values" issues and coddle the financial markets with artificially low interest rates. Most importantly low inflation is going to be used like a hammer to tamp down expensive cost-of-living increases for wages and pensions. Throw in a huge top level tax cut financed by treasuries, a new bailout, financed by treasuries and the inflation in the market place you have a total cost well in excess of what could be 5 trillion dollars.

When all is said and done it will not matter. The profits for this bubble are already made while the exodus of business and manufacturing from the United States to low cost countries will continue and even accelerate. Only when American wages and benifits are driven down to third world levels will it stop.

Historians have warned us that great nations, at the peak of their economic power, become arrogant and wage great world wars at great cost, wasting vast resources, taking on huge debt, and ultimately burning themselves out. Is that what's happening here? One thing I do know, for the first time in my life I am questioning what it means to be an American. I'm thinking as long as the top 1% look at their balance sheets first and the Pledge of Allegiance second its pretty much over .


"The money power preys upon the nation in times of peace and conspires against it in times of adversity. It is more despotic than monarchy, more insolent than autocracy, and more selfish than bureaucracy."

Abraham Lincoln

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