The Political Junkies

archived: 6 - 12 Jul, 2008 Back Next

UPDATED: JUL 9, 2008

HOW BAD?

How bad is the American economy – bad and getting worse.

These excerpts were taken from an article written by Van Hoisington and Dr. Lacy Hunt and published at Investor’s Insights:

Over the past fiscal year, holdings in the stock market, as measured by the Wilshire 5000 Stock Index, lost more than $2.1 trillion.

Simultaneously, the 15.3% contraction in the Case Shiller Home Price Index suggests the wealth loss in value of household residences was a staggering $3.1 trillion. Without including the negative wealth impact for declining prices of automobiles and other durables the total wealth loss was approximately $5.2 trillion.

Evidence indicates that transitory tax rebates produce no lasting benefit. Thus, another round of rebates, in view of the massive deficit already existing, would not be any more successful than the current round, or the previous one in 2001. The government merely usurps resources, which would have flowed into more productive private sector uses.

Other truly extraordinary symptoms of monetary contraction are also evident. In the past three months, commercial bank credit (loans and investments) plus commercial paper contracted at a 7.2% annual rate. A record decline for the nearly four decade history of this series . . . . The latest survey of senior lending officers by the Fed indicates that bank lending standards are, in general, higher than ever, and that credit availability is harshly constrained. The economy cannot grow without credit expanding.

The deterioration in consumer expectations is another significant event. According to the University of Michigan, consumer expectations slumped to a 28 year low in June, while the Conference Board's measure fell to the lowest reading in the more than four decade history of the series . ...

Numerous signs indicate that economic growth is decelerating worldwide, and that the trend is likely to continue. The OECD's World Leading Economic Index has declined 1.6% in the past 12 months . . . .

Against this backdrop of financial loss, Sen. McCain promises a balanced federal budget within five years if elected while cutting taxes. It is a pipe dream. As the USA Today editorial board notes:

The reality is that the federal budget is so far out of whack that you could eliminate about two-thirds of the defense budget, or all of the non-defense programs McCain would freeze, and still run a deficit this year.

By endorsing a continuation of the Bush tax cuts and adding others, McCain digs the hole deeper.

It is, of course, politically dangerous to raise the tough choices needed to rein in entitlements. No presidential candidate since Ross Perot has made the budget a priority, and voters have been unkind to candidates who endorse tax increases or benefit cuts. Nonetheless, if McCain wants the electoral gains that come with Monday's balanced-budget vow, he needs to offer more credible solutions for getting from here to there.

McCain’s proposal is more Republican economics – cut taxes and promise to balance the budget. It shills the hope that there is an easy fix to the horrid economy that Republican policy has helped make.

Not much “straight talk” here.

OZYMANDIAS
[Authored by Jay Greene*]

Sobering, sad report in Science (not available free online) this week on the state of archeology in Iraq. The world was made aware of America's wanton ignorance of such things as our troops stood by while the national museum was looted. Less widely reported was the looting and destruction of archeological sites around the country.

"Stuff happens" was the terse comment of Rumsfeld at the time.

We were not spectators, merely, to the looting. The report says both American and Polish bases were built in Babylon, damaging sites there. "Hey, doncha know there's a war on, fella?" is the obvious rejoinder BUT what is revealed further was the failure of the Pentagon to take cognizance of the country's rich archeology and instruct commanders regarding the significance and location of sites, so damage could be avoided if at all possible. Science says the matter was considered, prewar, but no action taken.

So, in keeping with the administration’s deep ignorance of the contemporary realities - political, economic, cultural - of the region was a blissful, fatal ignorance of antiquity.

Hence the title of this email. The lesson of the poem Ozymandias is so obvious as to be trite, yet I wonder how many in power, and those who lust for power, have read the poem or reflected on its message. All things pass and the most impressive display today will be as nothing tomorrow.

Conversely, when some structure or other artifact of the deep past has survived millennia - not mere decades or centuries, the passage of which impresses short term American thinking, when these things survive for ages, only to be bulldozed to make a landing strip, what does this say about the intellectual strength and commitment to civilization of those ordering the bulldozing?

The hideous crime - for it was and is a crime - of this administration was acting upon its towering ignorance, and arrogance, to start a war in the wrong place and for the wrong reasons and bring death and destruction across a wide swath of land and time, to no good purpose.

Ah, but we deposed Saddam, you will reply. So? The removal of that tin horn, who posed no threat to the US of A and whose murderous instincts were contained by us so he could not threaten his neighbors, is worth all that followed? People who, like our intellectually challenged President, believe Saddam's removal justifies the gamut of the consequences flowing from the decision to go to war need to read Shelley.

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*Jay Greene * is a frequent TPJ contributor. His article “Deadwood Act” is one of the finest pieces ever to appear in TPJ. Greene is retired, but he held top management posts in the steamship industry and international trade on the Pacific Coast.

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UPDATED: JUL 6, 2008

As we celebrate the Declaration of Independence this Fourth of July weekend, there are few periods of American history in which our constitutional rights have been under such threat – not from foreign enemies, but from a Republican Party slavishly devoted to defining constitutional powers to create a “unitary” President, an all powerful executive.

TPJ features but one item today on our home page, excerpts from a 2006 speech by former President Al Gore delivered to the American Constitution Society. His speech remains one of the best articulations of the threats confronting our generation and a clarion call to the Democratic Party to stand as the Party that will best preserve constitutional democracy in the United States.

Gore excoriated a Democratic Congress for failing to stand up to the Republicans and special interests devoted to creating a new “King George” in the United States. Next week, US Senate Democrats will largely provide support to pass FISA; including Sen. Obama, who promised a year ago to filibuster the bill.

Gore’s vision of the role of the Democratic Party in preserving constitutional democracy is as relevant today as when he addressed the American Constitution Society. Every American should consider the ten excerpted minutes of VP Gore’s address and we entreat readers to pass it among their friends and associates:

Tumble Weed (Bush) Watch