This could also be entitled ‘Denial is Not a River.’
What I want to know is where is the right? They should be on the barricades by now. But they continue to pretend that all is well and that the Bush cut-taxes-for-the-rich economy is working. Well it isn’t.
When the first indicators started appearing back in August of last year, the DOW was heading up to “another all-time-high” as the idiots on FOX News announced and with broad grins and puffed out little chests they denounced those that were more cautious and were already warning about the sub-prime crisis. But in today’s America, the real economical data is glossed over and scrapped for a superficial “everything’s great” approach. As late as December experts were still apparently oblivious to the real state of the union’s finances.
One of the major factors here is that the giant corrections that the market experienced when the tech bubble burst along with 9/11 (sorry to sound like Rudi but it really did have an effect) was that the economy slowed significantly from its Clinton days. This was, I’m sure a thorn in the Republicans’ side but their myopic approach to fixing the problem basically was to put a tax-cut band-aid on a gushing arterial wound. To move things along, the housing market was poked and jostled into action and Alan Greenspan decided, when interest rates were at a record low, to suggest ARM mortgages over fixed rate loans.
Millions of Americans were able to buy their houses for the first time as sub-prime borrowers suddenly qualified for houses which were already at utopic prices. The result is the sub-prime disaster and it has not gone away. Only to listen to FOX News or the right wing pundits, you would think it was nothing. Peanuts. But it isn’t. Merill Lynch just posted its biggest quarterly loss ever, Lehmann Bros. are axing jobs and homebuilding has seen its sharpest drop in 27 years. Building permits have dropped to levels not seen since 33 years ago as reported by CNN Money. The ensuing result is that the nations largest builders and at the same time, employers are reeling with huge losses.
That weakness has also hammered at the results of the nation's largest builders. A week ago KB Home (KBH, Fortune 500), the nation's No. 5 builder by revenue, reported a fiscal fourth quarter loss that was nearly 10 times worse than forecasts, as CEO Jeff Mezger told investors during a conference call that "As we enter 2008, we see no indication markets are stabilizing."
The DOW Jones Industrial average is almost back to where it was when Bush took office and basically, if an index doesn’t move forward, it’s going backwards against inflation.
Recession around the corner? No! The recession is here and what does FOX News report:
Bush to Lay Out Plan to Put Money in Your Pocket. President Bush to Push for Tax Rebates, Breaks for Businesses to Keep Economy Growing.
Economy growing? Growing? Guys, the economy is in free fall. Bush dropped the ball. He’s destroyed an unfathomable amount of capital, shredded the value of the US dollar and caused record foreclosures in the housing market. It’s the economy, stupid.
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2 comments:
One of the things I find so surreal about the media coverage is that they treat the recession and the war as if they are separate issues. Here are just two of the ways that the war is hurting the economy.
1) National Guard troops and reservists have less income, along with their families. This cuts their spending and certainly must be causing some of their mortgages to default.
2) Our government has gone over a trillion dollars more into debt from this war. This extra borrowing makes it harder for Americans to get foreign credit for personal and business concerns.
The extreme borrowing to finance the Iraqi occupation also lowers the value of the dollar. China has bought a vast amount of U.S. Treasury debt, and we have to pay that off with dollars, so we print more up and the supply rises. The value goes down.
But to get to the point of the post, you are spot on about the Republican optimism. It's as if optimism is your patriotic duty. It comes from the idea that WE Are The Greatest, and hence nothing can go wrong for us. What appears as optimism is really arrogance. Nothing is wrong because nothng can go wrong, and we are immune from the historical limits on Empire because of our Freedom. We can re-write the rules that dictated the decline of every other imperial power simply by believing in our power. Odd that no other imperial power ever thought of that, isn't it?
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