Bush And The Gas Bubble

Why is the price of gas so high? Why is crude oil trading at all-time highs? It seems like everyday we set a new record price for crude oil. Has there been an outbreak of another war in the Middle-East that I have missed? What I have learned is that the price of gas and the record crude oil prices have nothing to do with reality. The truth is that all those rich speculators and hedge fund managers that caused the mortgage crisis have now when that bubble has burst moved their money from the stock markets to commodities. That’s right with the market taking a beating from the credit mess the “smart money” has moved to oil speculation.

According to the statement from OPEC, the global market is "well-supplied, with current commercial oil stocks standing above their five-year average." Today's prices don't reflect market fundamentals, OPEC said, but the weakness of the dollar, rising inflation and the "significant flow of funds into the commodities market."[1]

So if there is not a shortage of oil why am I paying through the nose for gas? The problem is two fold. First there is greater consumption in the world, so what was enough five years ago is not enough today. With the addition of China and India wanting to fuel their industrial revolutions the reserves are not going as far as they use to. Of course you also have the US marketing and buying SUV’s and “crossovers” like there is no tomorrow. I’m sorry I need some help on this one, we have been aware of the problems of dependency on oil and other non-renewable fuels since the 70’s and yet here it is in 2008 and instead of having vehicles that use less fuel we have the biggest vehicles in our history. Newsflash – Crossover vehicles are not smaller fuel efficient SUV’s, they are giant station wagons.

Not exactly. None of this price run-up could be possible without the unbridled consumption of oil in the United States, by far the largest oil user, and the soaring consumption of rising economies such as China and India. Increasing political tensions make shortages a possibility, and markets factor in that risk, which drives prices higher.

"I think the biggest problem is pure fear. Right now there is no supply problem," said David Wyss, chief economist for the New York rating agency Standard & Poor's. "What happens if Venezuela goes to war in Colombia? What happens if various crises in Nigeria get loose? Iran is always making noises."

Fearing the potential for shortages, investors are willing to pay a premium.

"They're not buying oil, they're buying insurance," Wyss said.[2]

Now we are forced to go hat in hand to the Saudis and other oil producers to beg for an increase in production in the hope that this will reduce prices. The second problem is that it isn’t just about production, it is about our oil policy. It is about an oil policy that rewards the big oil companies with tax incentives to continue to buy foreign oil while we spend nothing on research for renewable sources and reduction in consumption. Our energy policy eerily resembles our drug policy, instead of trying to stem consumption we spend billions of dollars to eradicate the problem in the countries where it isn’t a problem. The Saudis do not have an energy problem, we do. So while President Bush wants to continue giving his big oil friends and family tax breaks our economy rapidly approaches meltdown. And all the while we hasten the process by purchasing vehicles that don’t meet our needs but instead meet our egos.

There is no oil shortage. What there is a shortage of is common sense and willpower. I recently saw a commercial from one of the big oil companies promoting how they are now part of the solution to our energy needs. Whenever corporate profits exceed any justifiable limit they immediately roll-out these PR ads stating how they are using all of these ungodly profits not to benefit the corporate elite, but average Joes like you and me. I sleep better already just knowing that big oil is working to create renewable energy sources that will conceivably put them out of business. Remember, ignore the man behind the curtain and focus on the great Oz. The greedy see an opportunity to enrich themselves again with commodities so don’t be surprised if the price of oil is not the only thing that rises. All of which will continue to put inflationary pressure on our economy and push us closer to the brink.

Instead of having regulatory agencies that protect the consumers from this type of speculation we have “free market” forces that for some strange reason are only good when they favor the wealthy. Why aren’t free markets good for all products? Why are we subsidizing commodities like produce, oil, and sugar? The truth is that we continue to subsidize these markets because our politicians have been bought and sold like so many bushels of corn and will continue to allow industries to write their own legislation and regulate themselves and in the end we will all suffer. We will continue to have to choose between gas and food or gas and medicine. Isn’t free enterprise wonderful? This bubble will eventually burst just like the previous ones, but in the process many families are going to be hurting and that will be the real tragedy.

[1] http://www.mcclatchydc.com/homepage/story/29586.html
[2] Ibid

Read more!

You Can Get With This Or You Can Get With That

Editorial columnist Bob Herbert of the New York Times wrote an interesting piece discussing the true cost of the Iraq War. According to a Nobel prize winning economist, Joseph Stiglitz and the vice chairman of Goldman Sachs International, Robert Hormats the Iraq War will cost at least 3 trillion dollars. This figure includes cost which are never reported by the media or discussed by politicians. The truth is that the cost of a war is more than the money spent on men and material, as if it were some business venture that can be tallied with a nice spreadsheet and budget. In today’s world, war is packaged like a corporate enterprise complete with sanitized videos and reporting to make it more palatable to the disinterested masses.

Said Mr. Stiglitz: “Because the administration actually cut taxes as we went to war, when we were already running huge deficits, this war has, effectively, been entirely financed by deficits. The national debt has increased by some $2.5 trillion since the beginning of the war, and of this, almost $1 trillion is due directly to the war itself ... By 2017, we estimate that the national debt will have increased, just because of the war, by some $2 trillion.”[1]

There should be a Constitutional Amendment that states, “no President can declare war without instituting a draft”. The problem today is that so many of us are unaffecting by the war in any personal and meaningful way. Oh sure we know people are dying, but they are strangers for the most part. Many of them who have received the least from this society are being asked to sacrifice the most. Yes, they are volunteers, but make no mistake about it for many in our society the choices are so limited that it is no longer a choice. For many of them it is a roll of the dice for maybe a better future and some better choices. Because they are brought home in secret we are never confronted by their deaths. I have never understood why we honor “our bravest” by secretly sneaking them back into the country following their greatest sacrifice. Is this how we honor our fallen heroes? This amendment would at least force the politicians who are tough on security to consider the fact that their children would be subject to the same opportunity to be heroes as those they so flagrantly send into harm’s way. It would also force us as a nation to debate the merits of any action being contemplated in our name, knowing that these decisions would affect all of us in a very personal way.

Instead of pouring 2 trillion dollars down the black hole that is Iraq, here are a few things we could have done right here in the good ole USA. We could have put an end to the partisan debacle that is Social Security for 50 years or more. And based on the Senate committee’s own spending calculations we could have enrolled 58,000 more kids into Head Start for a year with just what we are spending on one day of the war. We could also have enrolled an additional 160,000 low income students into college through Pell Grant funding for a year. Not in the calculations is how many of our fellow citizens we could have provided with healthcare insurance using this money.

Here is what I don’t understand we fight and we argue over providing support for those among us who are less fortunate and yet we spend this ungodly amount of money without batting an eye. What does it say about a country that spends trillions of dollars to kill people, but won’t spend any money to insure the healing of its own people. And to make matters worse one of the nominees for the next President considers the money well spent and wants to spend more. I don’t even blame Bush, McCain, or any of the other warmongers they are only doing what they do. I blame the American public for putting up with this crap. We have an economy that is in recession because we have allowed Bush to fight a war by mortgaging the future of our kids. We have allowed the politics of fear and false patriotism to trump democracy. In modern America war is good. Universal healthcare is bad. Free education is bad. Laying the groundwork for the neediest Americans with pre-school funding, tax credits and college grants, or employment training all bad.

Why is war good? It is good because it fuels the transfer of wealth from the middle-class to the wealthiest. It fuels the military-industrial complex and the war profiteers who in turn feed the lobbyists, who in turn purchase the politicians. You can’t spend all that money on war material and preparation and not use it. We must begin to cut our defense budget. We have spent all of this money on defense and it could not nor can it prevent 9/11 or any other terrorist type of attack regardless of the lies being spread to the contrary. This isn’t about look at all the wrong that America has done, it is about look at all the good America could do with a change in focus.

Of course there is also the toll that war takes on people’s lives through absences, injuries, and deaths. How can one calculate those costs? The loss of a parent, a brother, or son does not fit tidily into a balance sheet. The loss of a limb, a mind, or the trust in one’s government cannot be found in the defense budgetary process. How long will we continue to justify these types and sizes of expenditures for death and ignore the suffering going on right next door with our neighbors. You can get with the war or you can get with life, the choice belongs to all of us.

[1] http://www.nytimes.com/2008/03/04/opinion/04herbert.html?em&ex=1204779600&en=c44ca333e64258c9&ei=5087%0A

Read more!

How To Lose In November

You would think that after two unsuccessful Democratic Presidential bids that the members of the Party would have learned some things by now. I guess losing two elections to a Republican who will undoubtedly go down in history as one of our worst Presidents has taught them nothing. I am often surprised by the progressive critics of Senator Obama for not being specific enough in his speeches and being soft on policy. So I suppose Al Gore and John Kerry lost because they were not specific enough in their campaigns concerning policy and that George Bush won because he was more specific? I doubt anyone would accuse George Bush of being a policy wonk. No, the reason those two lost is that they were defeated not by policy, but by philosophy. Neither man had the tools to inspire the masses to overcome the political rhetoric of the Republican machine.

Does any progressive believe that Gore or Kerry would not have made a better President than Bush or that their policies would not have benefitted more Americans? The problem is this, most average Americans do not vote based on policy. I wish I could say that our voters were savvy and sophisticated and were abreast of the issues and the candidates, but this would be a lie. Unfortunately in a democracy while it functions best when the electorate is engaged and educated on the issues, it allows for the electorate to not be if they so choose. Do the majority of voters vote based on specific issues? I would submit to you that they do not. George Bush did not get elected because he represented the best policies for the majority of the voting public. So if it isn’t based on policy statements, then what is it based on?

Since the advent of television and its introduction into our political process our elections have fundamentally changed as the public has changed. We have gone from a nation of readers to a nation of watchers. Before the advent of television if someone wanted information they had to actively seek it out in books or newspapers. Today this is no longer the case, today our homes are bombarded by information on a constant basis. This would not be a bad thing if that information were honest and credible, unfortunately many times it is not. When the majority of the electorate bases it’s choice on questionable and often times false information then bad choices are going to be made. Which brings me to the criticisms of Senator Obama and their basis in a false reality.

There are many progressives who say that it is unfair to have a candidate that we know so little about. I would have to agree, if we lived in a perfect world where every candidate’s policies and records were presented in a truthful manner then this would not be too much to ask. However, we don’t live in that world. We live in a world where much of our political discourse is based on outright lies and deception. Where traits that in a normal world would be considered strengths are manipulated into weaknesses. We live in a world where a decorated war hero can be reconstructed into a lying unpatriotic coward based on innuendo and outright lies. The truth of the matter is that rightly or wrongly the majority of the American voting public is not comfortable with the truth. Many progressives believe that the candidates should be forthright and straightforward about their agendas and should be willing to tell the public some unpleasant truths. The reality is that many Americans do not want to hear these unpleasant truths, no matter how accurate they may be. And those who tell these truths are often times defeated in landslides.

The beauty about Senator Obama’s candidacy is that because he speaks to larger concepts instead of specific policies it is more difficult to craft false narratives about him. His opponents have a difficult time developing and targeting specific areas with which to attack him. While progressives see this as a weakness it is in fact under our current electoral conditions a strength, as Hillary Clinton can attest to. It is very difficult to attack hope, change, and dreams for a better America. So how do we know who Senator Obama is and what he will stand for? The answer to this question is not difficult to find. All one has to do is look at his life prior to this campaign and I would submit prior to his even taking elective office. Many times I have heard the comparisons between Bush and Obama and to me it seems ridiculous to compare the history of the two. All one has to do is to look at the history of the two men to see the foolishness of such a comparison. The Bush history has always been crafted in lies and misleading facts from his being a unifier as Governor of Texas to his belief in compassionate conservatism.

Senator Obama began his career as a community organizer in the ghettos of Chicago reaching out to the disenfranchised and the forgotten, while George Bush began his career as a trust fund baby drinking and drugging himself into oblivion. While Senator Obama spent his early adult years helping people, Bush was spending his helping himself. Bush had no understanding or empathy for those less fortunate than himself so his references to such were empty rhetoric crafted to reach an electorate that was either unwilling or too disinterested to uncover the lies.

In order for Senator Obama to win in November he will have to continue to speak to larger concepts mixing in specifics as they are warranted. Despite the progressive mantra to the contrary most Americans do not vote based on policy briefs, they vote based on a feeling. I know it is a hell of a way to elect the most powerful person in the world, but welcome to democracy. As long as Senator Obama is able to stay above the specific policy debates he will remain much more difficult to attack. While he leaves himself open to the “all sizzle and no meat” criticism which for the most part does not seem to be sticking, I think that it is a risk worth taking. Without those specifics the Republican attack dogs are left with few avenues of attack and the ones that they are left with are dangerous and subject to backfire against them. So far the best they have been able to come up with is the false Muslim story, his middle name, and he doesn’t wear a flag lapel pin attacks.

The difference between Obama and Clinton or Obama and McCain for that matter is not in policy, but in philosophy. Those two represent the past and Obama represents the future, a future we will help to craft. The thing that bothers me about the net-roots criticism of Obama is how they try to make it all about him and forget his message of change for all of us. I have read where people have written in blogs and in the MSM media of what if I don’t want to change, what if I am ok the way I am, well that’s fine no one says you have to change. Remember, the Flat Earth Society still meets annually and I am sure they are in the market for new members.

Read more!

The African Farewell Tour

What do you do when you’re the President of the most powerful nation on earth and your poll numbers hit 19%? Road trip! You run off to Africa; a continent long neglected and suffering with poverty and AIDs and act like the great white Santa Claus delivering good cheer and fat checks. In an effort to create a legacy and build some good will, it seems the Bushies decided that the best way to build large enthusiastic crowds would be to go to the place with the greatest need. Mr. Bush would have made a greater impact if he had went to some inner-city neighborhoods handing out all of that aid money. It is not that Africa is not worthy or in desperate need of the aid, but it seems odd that the same President that resisted taking action in the Darfur region of Sudan is now interested in Africa?

In a shameful display of irresponsibility, the leaders of key organizations—the U.N., NATO, the EU, and the AU—as well as of major countries like the U.S., France, and Britain have all remarked upon the horrors that have befallen Darfur, but then done nothing to stop the killing. The time for action is now.

If President Bush is serious about ending the genocide, he will have to do more than acquiesce in a role for the ICC. He will have to call these key leaders to Washington, lock them in a room, and not let them out until they have decided on a course of action. Only then will the ICC referral have real meaning.[1]

So the same President who watched the AIDs epidemic sweep across Africa, ruthless dictators murder their own citizens, and genocide now wants to tour Africa like some liberating hero. This liberator who has laid the ground work for a new strategic initiative that could put permanent US bases in Africa to counter Chinese influence and protect our “interests”. Hum, must be some valuable raw materials in need of protection from their native populations. I guess since his legislative agenda is laying around smoldering somewhere maybe it is time to do some of the things he was too busy to do earlier in his Presidency, like try being a statesman and not a war mongering chicken-hawk. Mr. Bush has given a new meaning to the word lame-duck. Whatever happen to all that political capital from 1984?

I can hardly wait to see how the McCain campaign is planning to use a President with a 19% approval rating. Maybe they can have him campaign in Kuwait or Saudi Arabia where I think he still enjoys a high approval rating. I am sure there are small areas in the US where the President enjoys some approval. My guess is that they will need him to shore up McCain’s cred with the social conservatives, he has already gotten a big boost from the recent furor over the NY Times story. However he will need George W. for the general election, despite his low ratings Bush still enjoys surprising support among the social wing of the Party. Will he be able to transfer that support to McCain still remains to be seen.

Unfortunately for W. it is going to take a lot more than a tour of Africa handing out aid checks to rehabilitate his legacy in the world. There have been times in his Presidency when he has been viewed by the world as second only to bin Laden himself as the most dangerous man on earth. Not the list you want the so-called leader of the free world to be on, but when you promote war and wanton destruction what can you expect. Will this trip help the world to forget Iraq? I doubt it, if anything the talk of the Africom project will only go to heighten suspicions.

George Bush is trying to end his Presidency the way it began with his infamous “compassionate conservatism”. There is only one small problem the seven and a half years in between have provided us with a war with no end in sight, a weaker Constitution, and a major recession. No amount of deodorant can get rid of the stench that will be the Bush legacy. The problem with these efforts on the part of the President is that they are seven years too late, maybe if he had been more interested in fighting poverty and disease in the world more than spreading violence he wouldn’t have needed to try to buy a piece of history.

COTONOU, Benin -- President Bush began a five-country journey through Africa on Saturday saying that U.S. aid to the continent comes with "great compassion."

On his trip, Bush is trying to show that the United States has a moral imperative as well as economic, political and national security interests in fighting poverty, disease and corruption across the continent.[2]

[1] http://www.brookings.edu/opinions/2005/0405africa_daalder.aspx
[2] http://www.washingtonpost.com/wp-dyn/content/article/2008/02/15/AR2008021501271.html

Read more!

Regulators, Mount Up

As the mortgage crisis continues to worsen and the big R word (recession) is showing up more and more in stories about the economy, it once again illustrates the true intentions of corporations and the Congressional minions who do their bidding. For the past three decades the conservatives and the corporations have been continually assaulting the regulatory arm of the Federal Government. Whether it is the inspectors that safeguard our food supply, our water, or our medicines all have been under attack. Although it is never presented in truth, but always in code, the fact remains that the goal has been to weaken our ability to regulate their business practices.

The code is couched in language like “big government”, free market, and self-regulation. The results of course have always been the same; pollution, tainted food and medicines, and loss of consumer choice. Because they have been so good at their marketing practices anyone who has the audacity to request regulation is immediately labeled a socialist or obstructionist. Every time deregulation has come to an industry the consumers have suffered, whether it was communications, travel, or banking. Deregulation requires us to rely upon the greediest to recognize the common good and to do it, instead of maximizing their gains. Why anyone would think that this would work is beyond me.

The scary part is that even when misdeeds are reported by the few regulators we have, they often times go unheeded. Whether it is Medicare fraud, war profiteering, or gas price gouging the response is often times the same; inaction on the part of superiors or a cover-up. How many stories have we read of government “whistleblowers” who were retaliated against by managers or supervisors, hell we even had to create a law making retaliation illegal? The latest in the long saga of ignored warnings is the mortgage crisis, it appears that almost a decade ago there were warning signs and alerts that were being ignored. This included a direct warning to Alan Greenspan, our economic guru and market manipulator. Although Mr. Greenspan has always claimed political neutrality, many of his policies were timed to benefit the current and past Republican administrations.

In order to keep the “recovery” on track for young Mr. Bush, Mr. Greenspan ignored warnings from a Federal Reserve governor and an advocacy group to investigate the growing lending crisis. Lenders were initiating risky loans as early as 2001 and were generating mortgages that would balloon into unmanageable payments for the borrowers. I remember when I first heard of the balloon mortgages, my first reaction was disbelief and slowly over time turned into anger. The concept to me seemed as solvent as the “junk bond” fiasco that took place two decades earlier, both were predicated on greed and the lack of financial knowledge of the consumers. Just because someone can get credit doesn’t mean they understand credit.

WASHINGTON — Until the boom in subprime mortgages turned into a national nightmare this summer, the few people who tried to warn federal banking officials might as well have been talking to themselves.

Edward M. Gramlich, a Federal Reserve governor who died in September, warned nearly seven years ago that a fast-growing new breed of lenders was luring many people into risky mortgages they could not afford.

But when Mr. Gramlich privately urged Fed examiners to investigate mortgage lenders affiliated with national banks, he was rebuffed by Alan Greenspan, the Fed chairman.[1]

Because Mr. Greenspan was trying to create the illusion of prosperity to buoy the fortunes of President Bush, he refused to rein in a lending market that had gone crazy. In what is being called the pursuit of innovation and Mr. Bush’s “ownership society”, lenders were allowed to generate loans to low-income or sub-prime borrowers. While in theory this was an excellent goal, because it represented a market that had longed been ignored and discriminated against. However, when theory became practical application the sharks began to infest the waters. These consumers who were not credit savvy were placed into loans that promised initially low interest rates, but were back ended with astronomical rates that based on their incomes the consumers could not afford. Also included in many of these loans were predatory lending fees and clauses that bound the consumers to these high interest loans for years.

Customarily, mortgaged loans are generated by one institution only to be sold to another lender after about a year. Many of these loans were created with high buy-out clauses that prevented the loans from being sold or allowing the consumer to shop the loan for a lower interest rate. The good news is you finally get a home; the bad news is in three years you won’t be able to afford it. This is the results of the Republicans privatization of HUD. Rather than having the government regulate and assist with these new homeowners, the conservatives believe that the consumers are best served by private industry. The same private industry that ravaged the communications, healthcare, and airline industries was entrusted with the lives and homes of unwary consumers. Now, that shouldn’t have set off any red lights or alarms.

“Why are the most risky loan products sold to the least sophisticated borrowers?” Mr. Gramlich asked in a speech he prepared last August for the Fed’s symposium in Jackson Hole, Wyo. “The question answers itself — the least sophisticated borrowers are probably duped into taking these products.”[2]

The problem I have with corporate America and their Congressional minions is not capitalism, everyone is entitled to make a buck; no it is their greed. With these guys there is never enough money, power, or stuff. The truth of the matter is there was no Bush recovery; it was all smoke and mirrors orchestrated by Greenspan, the markets, and the corporations. This explains why even with a “so-called” recovery middle and poor Americans were still struggling and there was no consumer confidence. I just hope the next administration will have the courage of its convictions and will rein in the greed that has been allowed to run rampant for nearly a decade.

[1] http://www.nytimes.com/2007/12/18/business/18subprime.html
[2] Ibid.

Read more!