– ‘his campaign’s lack of any tangible racially-based resentment.’
– ‘the fact that Reagan assured the United States a spectacular economic recovery, but nevertheless, paid for it with social inequalities that little-by-little have surpassed by way of inconvenience the advantages brought by free markets.’
– ‘the sometimes incredible stagnation of all public facilities in a country where the pressure for lower taxes has kept railroads, airports and sometimes roads at the technological level of the 1970s.’
– ‘the generation of children of humiliated communists and progressives, who are today rich and in power, and who are tempted to inflict a spectacular defeat on the American right.’
And what hope do U.S. Republicans have of beating Obama?
Read on at WORLDMEETS.US, along with continuing translated foreign press coverage of the U.S. election.
Some people are horrified by tragedy and saddened by misery. Other people see opportunities in both.
9/11 was a tragedy for this country, but Bush and company used it as an excuse to do what they had wanted to do for a long time before this tragic event—invade Iraq. The misery at the gas pump Americans have been experiencing in recent months has provided yet another opportunity for Bush and the Republicans to promote an old idea that had little previous traction—offshore and ANWR drilling.
Searching through the waste bin for castaway ideas that were never good to begin with, and are no better in meeting contemporary needs than they ever were, may turn heads during times when heads are easily turned. But it’s a low form of politics. An approach that rarely if ever merits support.
You have to seriously wonder about Republican presumptive Presidential candidate Senator John McCain’s grasp of political imagery and desire to win over not just swing voters but Americans who are losing their homes, lost their jobs, and who can barely afford to fill up their gas tanks: according to columnist Robert Novak, McCain plans to keep former Senator Phil aka “mental recession” Gramm on as not just a campaign adviser but a campaign surrogate.
Unless you’ve been on Mars, Gramm is the former Senator who sparked not just a firestorm of denunciations but a hailstone storm of derision — and comedian and other joke punchlines — by saying the United States was merely suffering from a “mental recession” and that financially beset Americans were “a nation of whiners.” Once the firestorm broke, Gramm tried to clarify the statement as many politicos do, by saying he didn’t mean it meant what it sounded like he meant — which all but a recently removed gallbladder in a jar in at Mercy Hospital in San Diego know he meant.
But he insisted he stood by the statements…giving America the most vivid example yet of the formal end of the pretext of “compassionate conservatism.”
He claimed it was only talking about American’s political leadership. Which still didn’t explain what he meant by a mental recession. This was followed by some conservative talk show hosts saying, by golly, Gramm IS misunderstood and IS right — the economy really IS sound. (You can’t say “sound as a dollar” anymore because the dollar isn’t sound.) These hosts know the American economy is sound because they’ve seen this as they ride in their chauffeured limos and fly their private jets to speaking gigs.
McCain’s action as reported by Novak shows that he prizes political and personal loyalty, since Gramm is a longtime friend and close adviser That’s laudable enough.
But keeping Gramm on as a high-profile adviser will allow the Demmies to run quotes of Gramm’s comments in ads between now and the election as an example of someone who’ll be close to a President John McCain in a policy-making capacity.
Needless to say, the Obama campaign jumped on the news:
Senator McCain’s economic plan gives nearly $4 billion in tax breaks to the oil companies but doesn’t provide any tax relief to more than 100 million middle-class families. But that shouldn’t come as a surprise since today we learned that Phil Gramm will continue to advise Senator McCain on economic policy despite calling Americans struggling in this economy ‘whiners,’”.
Novak’s column frames this as a case of two people patching up a relationship.
The problem for the McCain campaign: most voters won’t perceive this election as an extended episode of The View, with recriminations, gaffes, ending in tearful apologies and people making up.
At a time when many Americans need to take out a loan to fill their gas tanks but can’t because they can’t get a loan on their house because their house is being foreclosed-on and their bank that would give them the loan is on a list of endangered banks, a surrogate and adviser who made a statement calling them “whiners” won’t be a stellar asset. As an adviser or a CREDIBLE on-camera surrogate.
It certainly sounds as if Christmas has come early this year for the Democrats.
Even though Santa can’t say “ho, ho, ho” anymore without being accused of slurring women, he can and has given Democrats the gift that most assuredly will keep on giving.
This is a Guest Voice post by journalism professor and author Walter Brasch who is also a syndicated newspaper columnist and radio commentator, and president of the Pennsylvania Press Club. Guest Voice posts do not necessarily reflect the opinion of TMV or its writers.
It’s Still the Economy, Stupid
by Walter Brasch
George W. Bush looked into the TV camera, Tuesday morning [July 15] and tried to assuage the fears of about 300 million Americans who believed they were in the middle of a Recession.
“The economy is growing,” said the President. “Productivity is high,” he told us. “Trade’s up. People are working,” he said. In the Bush White House, the “R Word” is just a myth. Of course, the man who once wanted to be known as the Compassionate Conservative did say he knew “It’s been a difficult time for many American families.”
“Difficult” doesn’t even begin to describe what has happened to Americans the past seven years.
Within hours of the President’s speech, a less optimistic Ben Bernanke, chair of the Federal Reserve, told the Senate Banking Committee that inflation is high and “seems likely to move temporarily higher in the near term.” In sworn testimony, he told the senators that “Many financial markets and institutions remain under considerable stress, in part because of the outlook for the economy and thus for credit quality, remains uncertain.” Market Watch reports that over the past year, “inflation at the wholesale level gained 9.2%— the largest year-over-year gain since June 1981.”
On the day that the President assuaged and the Federal Reserve chairman testified, General Motors announced it would freeze job hirings in several areas, lay off salaried workers, suspend shareholder dividends, and borrow up to $3 billion. Six weeks earlier, GM announced it was closing four plants; on the day the President spoke, GM announced four more plant closings. The nation’s largest corporation, which saw a 16 percent sales decline in the first half of the year, announced that it was giving retired workers a slight pension increase but was cutting health care benefits.
About 8.5 million Americans actively seeking work are unemployed, an increase of about 21.4 percent over one year ago, according to the Bureau of Labor Statistics (BLS). The unemployment rate of 5.5 percent is up from 4.6 percent a year ago. More important, about 1.5 million of the 8.5 million unemployed have been unemployed at least six months, a 37 percent increase over the past year, according to the BLS. Not included in the numbers are the “1.6 million people who are ‘marginally attached’ to the workforce, who had looked for work in the previous 12 months, but not in the last month,” according to Andre Damon of Global Research. Damon also reports that the BLS data does not include about 420,000 “‘discouraged workers’, who had given up looking for work because they think that there is no work available.”
Work is available in dozens of other countries, where American companies seeking to “maximize the bottom line” have been outsourcing jobs for years. About 14 million American jobs are going to be outsourced in the next four years, according to a report issued by the University of California at Berkeley. Short-sighted and greedy, these CEOs and their boards believe child labor and wages that can dip below $1 an hour is just another acceptable business practice. The “Made in America” label is now becoming as extinct as corporate morality.
Americans who have been using credit cards to survive the Recession and have now reached their credit limit can raise their limit or sometimes reduce their payments or rate. All they have to do is call a credit card agency’s toll-free number, which is answered by someone at a call center in India. Those same call centers are also telemarketing Americans to get into even more debt by getting credit cards.
In a true “global economy,” as many now euphemistically refer to outsourcing, persons having trouble with their computers assembled from parts made in Mexico and several Asian countries can now call technicians in India for assistance. Read the rest of this entry »
“Out of everything that was said during the summit, which ended yesterday in Hokkaido, Japan, there was only one clear message - and it was not encouraging: the great powers have no joint approach with which to tackle the global economy’s momentous difficulties. Every country will have to take care of itself, if it can - which is possible in Brazil’s case - and the poorest and most affected by the food crisis and high oil prices can expect only modest assistance to avoid sinking into misery and social and political chaos.”
“Confronted with skyrocketing oil prices, the rising cost of food, the financial crisis, chaos in the money markets and finally, global warming, the powerful have no convincing response to provide the world.
On all of these issues - and without forgetting the Iranian nuclear threat, the G-8 Summit in Japan has illustrated the impotence of the major industrialized nations which, until recently, were able to impose their views to the rest of the planet.”
“The absence of vision is largely the result of the now-concluding American administration, which only recently recognized the existence of the problem.”
It’s interesting to compare the economic crisis behavior of two Federal Reserve chairmen—Paul Volker and the present holder of that post, Ben Bernanke.
In 1982, while Volker (who is 6′6″ tall by the way) persided over a sluggish economy and raging inflation, running early that year at an 8.9 percent rate, many economists were wary of atacking inflation too strongly. They believed it might plunge the country into a deep recession. Volker knew the risk but acted decisively nonetheless.
He clamped down on the money supply and caused interest rates to shoot up. The perdicted recession came and it was a doozy. But it lasted just a few months and by the time 1982 ended, the inflation rate had fallen to 3.8 percent.
With inflation now way down and with markets assured that the Fed meant business when it came to keeping it down, the economy quickly surged back. The Volker recession made possible the so-called “Reagan economic miracle” that followed, good times really only possible because of Volker’s guts in doing what had to be done in spite of near term howls. Tall Paul.
Which brings us to the present. Late last summer there were great upheavals in financial markets and economists, Wall Streeters and the political classes were afraid a recession might result. They demanded tht the Fed cut interest rates and keep cutting them with no regard for the effect on inflation. Fed Chairman Bernanke accommodated.
Since oil is priced in dollars, its price went up and up as U.S. interest rates came down and down. Bernanke did the popular thing and as the expression goes, “let the inflation genie out of the bottle.” At the just completed Open Market meeting, he still seemed to be trying desperately to balance the risks of economic slowdown versus the risk of inflation, failing to take the only step that could check the latter. A sharp increase in interest rates.
Such an increase would almost certainly produce an even deeper economic downturn. It would also, however, cause the price of oil to plunge, inflation fears to quickly ebb, restore credibility to the Fed, and very likely allow a new upward cycle to begin after the necessary pain.
Chairman Bernanke has given no indication he will take this drastic but necessary step any time soon. Tall Paul. Not so tall Ben.
One of the biggest meetings ever of the world’s top economic heavies took place this past weekend in Saudi Arabia. Finance ministers, oil sheiks, bankers, corporate CEOs, ever a few government heads, assembled to reassure the world that sky-high prices for energy could be kept under control. So why were so few people reassured?
Frightened Little Men
They met to shape our daily lives
It’s basics and its graces,
Our economic masters
From near and distant places.
The media were reverent
Let speakers posture, preach,
They would (’twas hoped) devise ways to
Keep energy in reach.
But as I watched quite carefully
I saw what I had feared,
These masters of economies
Are little men—and scared.
The title ‘Getting Gas In Mexico’ may sound like the opening line to a really bad joke about mexican food but it is actually part of a hidden secret for those who live near the US/Mexico border.
In San Diego for example the average cost of a gallon of gas is running around $ 4.61, which is sadly typical for those of us living in the Golden State. But if you drive across the border to Mexico then the cost drops to about $ 2.54 per gallon and it’s even less if you convert over to pesos first.
There are several reasons for cheaper gas in Mexico. They are of course a major oil supplier, so they do have the advantage of resources. In addition, the state owns everything from the oil fields to the refinery, and while state ownership has many flaws it does allow the state to set the price. A 20 billion dollar subsidy is helping to keep the costs down.
Of course like everything that seems to good to be true, there are some catches to this special deal. For one thing, the local gas station is down the street while Mexican gas stations are a 30 minute drive away. Heading home can be an even longer drive due to traffic, often taking 1-2 hours.
As a result, the car may end up burning away all of the savings. According to the linked article, a car can burn a gallon of gas for every hour it idles. So the drive and the idling could burn 2-3 gallons of gas, though even then it is likely you would save some money over the whole tank.
On the other side of the spectrum, it seems some Native American reservations may be profiting from the mess. Since they are exempt from many taxes, it was long possible for reservation gas stations could charge less, but these days those deals appear to have vanished.
(September 2007—May 2008)
We’re firm in our convictions
And we’ll stick with our priorities,
For us a weak economy
Will always cause the most unease,
We’ll lower rates, if that’s the need
To get an upturn into gear,
And if this boosts inflation, well,
That’s something we don’t really fear.
(June 2008—Who Knows?)
We’re firm in our convictions
And we know our true priorities,
For us when prices hit the roof
We see this as the worst disease,
So ‘gainst inflation we’ll jawbone
And if big price jumps that don’t cap,
We’ll just start raising rates again
About inflation we ne’er nap.
June 12th, 2008 by SWARAAJ CHAUHAN, International Columnist
We often hear that the world is now a “global village” and “globalization” is inevitable. But there are warning signs we cannot overlook. Two experts point out that “for the first time in more than 200 years we are moving into a world not wholly dominated by the West.
“If we want to influence this environment rather than be held to ransom by it, and if we want to take hold of some of the worrying features of globalisation, then real, practical multilateralism is a strategic necessity, not a liberal nicety…
“Today’s security agenda is often presented as a long list of threats: international terrorism, transnational crime, the threat of a new pandemic, energy insecurity and the dangers of climate change. These are all pressing issues but it is too easy to present them as disparate and unconnected…”
The two experts are Lord Robertson of Port Ellen, a former General-Secretary of Nato, and Lord Ashdown of Norton-sub-Hamdon, formerly the High Representative of the International Community in Bosnia & Herzegovina. They are co-chairmen of the IPPR Commission on National Security in the 21st century.
Leave it to the deaf, dumb and blind president of the United States to help drive already out-of-control oil prices into the stratosphere by further upsetting the always delicate balance in the Middle East through another round of saber rattling.
It is not unreasonable to conclude at this point that George Bush is so inept that he literally cannot do anything right beyond handing the grieving parents of an Iraq war casualty a medal and folded American flag without dropping them.
The Iraq war has been unique in American history in that the president has worked hard to make it sacrifice free and has largely succeeded. But now we all are feeling the effects of a war without end at the pump and supermarket checkout line even if most of us have not made the connection.
Don’t expect John McCain to do the math for us because he’s too busy beating the bomb Iran war drum with the president. Besides which, $5 gas and spiking food prices are justified because we’re making the Middle East safe for democracy, right?
Analysts described the global oil market as “hysterical” and “shooting itself in the foot” after oil futures jumped a staggering $11 a barrel on Friday to set yet another new record at over $138 a barrel.
This development, combined with still more bleak economic news as the unemployment rate surged to 5.5. percent in May, the biggest increase in more than two decades, further fanned recession fears. Some 330,000 Americans have lost their jobs because of Bush economic policies since the year began, while government unemployment figures do not include the millions of Americas who have run out of benefits and are no longer looking for work.
But while the U.S. may not be technically in recession according to some economic parameters, that is of cold comfort to consumers.
Consider this while you pump $50 worth of gas to fill your thrifty Honda hybrid or $120 to top off your macho-man Chevy pickup truck: Rising inflation continues to eat into your paycheck like the rust around the wheel wells of the car you can’t afford to trade in because you’re so deeply in hock to mortgage and credit card companies. As it is, wages grew at less than a 1 percent rate on an inflation-adjusted basis in the first quarter of the year.
Gas prices paid by Western Europeans are much higher than those paid by Americans. But at least Europeans get something good back for their pain at the pump—first rate public transportation infrastructures. What’s our own return from gas prices that have risen almost a buck a gallon in recent months?
In Praise Of Gas Taxes
I know free markets generate
A host of things desirable
But when it comes to energy
They’re kind of unreliable.
The markets’ mix of greed and fear
With oil has spawned great dismay
I mean no disrespect, of course
But might there be a better way?
If gas costs rise because of taxes
And not to suit big traders’ dreams
The extra price consumers pay
Could fund big public transport schemes.
A buck a gallon paid to Sam
It’s true would add to drivers’ woes
But what comes back is better than
Enriching oil CEOs.
This morning, financial news channel CNBC was kind enough to point out that “The Reuters/University of Michigan Surveys of Consumers said the final reading in May for its index of confidence fell to 59.8 from April’s 62.6, slightly above the median expectation of 59.5 in a Reuters survey of economists. May’s reading was the lowest since 58.7 in June 1980….”
Although this article mentions that “one-year inflation expectations surg[ed] to 5.2 percent” and “five-year inflation expectations jumped to 3.4 percent”, you got a different picture if you actually watched CNBC this morning. On TV, they were talking about the work of economist John Williams (no, not the guy who writes those cool soundtracks for George Lucas and Steven Spielberg). Alas, CNBC did not have the clip online, but here’s what he says:
John Williams, who spent more than two decades as an economic consultant to Fortune 500 companies, said the government figures understate the true rate of inflation.
Williams, who runs Shadow Government Statistics in Oakland, which tracks changes in inflation, unemployment, the gross national product and other data, said that over the past 25 years, the government has changed the method of calculating price increases in ways that have lowered the reported inflation rate.
The changes include measuring the cost of shelter by rental prices instead of home values, as well as giving nearly as much weight to high-ticket items such as cars and electronics as to daily necessities such as food and gasoline.
According to Williams, if the government measured inflation based on pre-1982 methods, it would be running at 11.6 percent right now, or 7.3 percent using pre-1998 calculations.
“I don’t think the government numbers are too credible,” Williams said.
That’s right, the real inflation rate, as measured 25 years ago, would be more like 11%. And keep in mind that you have bills that didn’t exist when Reagan took office: you might not have had a cable bill, you probably didn’t have a cell phone bill, and you certainly didn’t have an internet services bill. No wonder our personal budgets are out of control, particularly when you consider that wages have not kept pace with the under-reported inflation we currently have.
That seems much more in line with your experience at the mall and grocery store, doesn’t it? I wonder what the real unemployment rate is.
Heightened international competition for the planet’s scarce resources has begun, and it’s emerging nations that stand to lose the most, warns O Globo of Brazil’s chief international columnist, William Waack.
“The first is contained in a report from the respected International Energy Agency , which assumes that geological and geopolitical reasons will inevitably lead to an oil supply crisis. … The other interpretation follows the same scenerio (price inflation, competition for scarce resources) but arrives at a far different conclusion. The rising cost of a barrel of oil will lead to a slowdown in the global economy, which will prevent the emergence of a crisis in supply.”
“The emerging nations will have to compete, perhaps for the first time, for the same resources available to the already rich and developed.”
By William Waack
Translated By Brandi Miller
May 23, 2008
Brazil - O Globo - Original Article (Portuguese)
The immediate consequence of the explosion in oil prices is clear and irreversible in the short term. It’s the global inflation that has manifested itself in higher prices for food, airfares, freight costs, consumables and finished products in many sectors.
But for the medium term, there are two conflicting interpretations. The first is contained in a report from the respected International Energy Agency , which assumes that geological and geopolitical reasons will inevitably lead to an oil supply crisis. This interpretation was the immediate cause of nervousness on oil markets this Thursday (May 22).
The other interpretation for the medium-term follows the same scenerio (price inflation, competition for scarce resources) but arrives at a far different conclusion. The rising cost of a barrel of oil will lead to a slowdown in the global economy, which will prevent the emergence of a crisis in supply.
It’s difficult to resolve this “battle” of interpretations at the moment. Other similar episodes of rising oil prices show that higher prices spur new technologies and the better use of fuel. In the decade of the seventies, the “shocks” in price and supply (caused by geopolitical, not geological reasons) were absorbed by a fantastic technological revolution - the information age.
READ ON AT WORLDMEETS.US, along with continuing translated foreign press coverage of the United States and the global energy and food crisis.
May 23rd, 2008 by SWARAAJ CHAUHAN, International Columnist
We bloggers/journalists love to chase political stories, while our response to the critical economic issues is generally similar to those related to climate change. I wonder when our fraternity would realise that environmental and economic issues are as much “political” and important as the ones perceived as the “real political” ones.
I was again reminded of this when I read a report in a recent issue of The Economist that “double-digit price rises are about to afflict two-thirds of the world’s population”. At times I wonder what right the media/blogs have to criticise the political leadership when the former itself triviliazes (or fails to understand) the real and important issues.
“Ronald Reagan once described inflation as being ‘as violent as a mugger, as frightening as an armed robber and as deadly as a hit-man’. Until recently, central bankers thought that this thug had been locked up for life. Thanks to sound monetary policies, inflation worldwide had stayed low in recent years. But the mugger is back on the prowl.
“Even though America is close to recession and growth in other developed economies has slowed, inflation is rising. Jean-Claude Trichet, president of the European Central Bank, this week gave warning about the mistakes of the 1970s, when inflation was let loose at huge cost to growth. His words were aimed at rich-country central banks, but policymakers in emerging economies are the ones who should most take heed.
“In countries such as China, India, Indonesia and Saudi Arabia even the often dodgy official statistics show prices have risen by 8-10% over the past year; in Russia the rate is over 14%; in Argentina the true figure is 23% and in Venezuela it is 29%. If you measure the numbers correctly, two-thirds of the world’s population will probably suffer double-digit rates of inflation this summer (see article).
“Taken as a whole (and using official figures), the average world inflation rate has risen to 5.5%, its highest since 1999. The main cause has been the surge in the prices of food and oil, which briefly soared above $135 a barrel this week. But Mr Trichet’s concern is that higher headline rates could push up inflation expectations, leading to bigger pay demands, and so trigger a wage-price spiral, as in the 1970s.” More here…
Government’s Economic Misinformation Campaign Peaks
Americans are pretty used to getting bogus economic information from their government and the barons of Wall Street. But today, May 14, 2008, this misinformation campaign may well have peaked. We were informed that inflation during April was “modest,” and only increased a piddling .02 percent.
How is this possible, you might ask? Or at least, you might ask that if you lived in the real world rather than Economist Land. Here’s the answer. A truly incredible one.
Food prices went up more than at any time in the last 18 years during April. Housing, medical care and clothing costs were also all up substantially. Natural gas prices shot up, too. But gasoline, according to the number crunchers charged with feeding us economic data, gasoline prices dropped by a hefty 2 percent during April and that was the prime cause of the overall modest inflation increase for the month.
Gas dropped 2 percent, you exclaim? Are they nuts. It was way up. Anyone who bought gas during April knows that.
Well, yes. The average price of gas did, in fact, increase by a whopping 5.6 percent during April. But, according to the Commerce Department, which is charged with fudging numbers in this realm, on a seasonal basis it really dropped 2 percent. Got that?
Far be it from me to gainsay the wisdom in this statistical approach. Personally, I don’t know anyone who buys gas on a seasonal basis, only on a daily basis. It might be worth noting, however, that this kind of thing makes the people playing so very, very cute with official numbers look like con artists. And generally speaking, this is not a good way for supposedly professional economists to look.
Or Americans will begin taking them even less seriously than is already the case.
The world’s second most populous nation is up-in-arms over remarks recently made by President Bush, as he attempted to explain rising food and energy prices to an audience in Maryland.
The president said the following:
“There are 350 million people in India who are classified as middle class. That’s bigger than America. Their middle class is larger than our entire population,” said Bush. “And when you start getting wealth, you start demanding better nutrition and better food. And so demand is high, and that causes the price to go up.”
Minister of State for Commerce, Jairam Ramesh: “George Bush has never been known for his knowledge of economics. And he has just proved once again how comprehensively wrong he is.”
West Bengal’s Chief Minister Buddhadeb Bhattacharjee: “It is preposterous for anyone to say that global food crisis, including the crisis in America, is because Indians are eating more. It is needless to say what the Indians get to eat or what they (Americans) eat. This only shows how he has lost his senses” … he added that Bush’s remark was nothing more than a “cruel joke.”
But striking a conciliatory note, Surojit Chatterjee writes for the Business Times: “Being well-informed or choosing words carefully are not his specialty. … Let’s be forgiving to the U.S. President. … Let us stop pointing fingers at one another and receive Bush’s remark with a pinch of salt and a hearty laugh.” Read the rest of this entry »
