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This Is What Democracy Looks Like
www.NationalView.org's Note From a Madman
July 21, 2008
The CPI and the Way They Planned It
Every so often I like to check out the Bureau of Labor Statistics and see what
the Consumer Price Index (CPI - a.k.a. Inflation) is doing. By now we all know
that a growing economy will have price increases. For that reason, the
Department of Labor's BLS.gov website tells us the cost of goods as compared to
what $100 in 1982 was worth. (By the way, it was worth $100). Today, you would
require nearly $220 (218.815) to purchase what your hundred bucks would buy you
in 1982.
The June 2008 report has a few numbers, and a couple of statements, which jump
right out at you. Just a quick browse of the page (http://www.bls.gov/news.release/cpi.nr0.htm)
shows the big one that simply cannot be missed.
-Compound Annual Rate 2-Months ended June 2008: Energy: 53.6 percent
In just three months the US energy index is up by more than half. The
twelve-month increase of 24.7 percent is staggering enough, but 53 percent tells
a really sad story.
And the story it tells is of a federal government, led by George W. Bush, not
caring; it tells of an administration without foresight, or at least without the
foresight required to aid the American people - their charges; and it tells a
story of a President who would rather "stick by his guns" and "stay the course"
on an economy which was designed by, and for, a few very rich people.
Yes, the Bush "base of haves and have mores" have really profited by their
hand-picked President. To the victors go the spoils.
I knew I smelled something rotten.
While energy prices rise, our leader in the White House, and his would-be
successor John (you all know who I mean) tell us things like the answer lies in
off-shore drilling and producing more oil refineries. Just this past week
President Bush removed the restraint on off-shore drilling which his idol,
President Ronald Reagan, put into effect in the 1980's. Big Oil is still waiting
for Congress to release their similar restriction.
But even if Bush and McBush, who was against off-shore drilling before he was
for it, were to get their singular, but collective way, it wouldn't make a dent
in the cost of fuel for our cars or for our homes anytime soon. In fact, some
experts say it won't make a difference at all, unless you happen to own stock in
Big Oil companies.
While all this talk of "fixing" our oil crisis rolls around the Sunday Morning
talk shows as political fodder, real solutions are placed on the table (or maybe
under the table in the round file). Releasing some of the strategic oil
reserves, which comes from some of the millions of barrels of oil we purchase
every year, also helping to drive the price up, would be a nice start. But that
might cause the harm which this, The Administration of Diminished
Responsibility, consider to be the most important constituents they have - Big
Oil and the very, very rich.
Another way in which the Bushies could help would be by working with Congress
and enacting real CAFE standards. Increasing the MPG would go a long way towards
solving our "addiction to oil" which President Bush finally discovered just two
years ago. But, alas, again that might eat into Big Oil profits and, certainly,
the Bushies couldn't allow that one to fly.
And, finally, a more drastic measure would be to force auto manufacturers to
build only vehicles which met those CAFE standards. Outlaw those vehicles which
simply aren't fuel efficient and make them obsolete soon. It's a solution that
an administration with foresight and a will ton help the American people would
have seen already.
That is, unless they were blinded by the greed of their "base".
-Noah Greenberg
Have You Noticed?
Have you noticed all of the criticism Obama took for suggesting that we
negotiate with our enemies? I remember some caustic reprimands from the White
House having to do with his alleged naiveté. Are you not intrigued that, last
week, the US sat down at the negotiating table with Iran? Isn’t that what Obama
suggested? How has McBush responded? I haven’t heard.
Have you noticed that the White House now has adopted a “horizon” for
withdrawing troops from Iraq? Isn’t that what Obama suggested? How has McBush
responded? I haven’t heard.
It does, however, make me nervous that the White House has now embraced two key
components of Obama’s foreign policy, you know, the policy he was incompetent to
develop. Given that we know the White House to be eminently competent but
totally corrupt, what do you make of this apparent shift to rational behavior?
Has the money begun to flow in a different direction? We all know that the White
House is all about the money, what has happened to generate two such significant
changes in policy? It appears that they have hung McBush out to dry. But, they
wouldn’t do that, would they? What’s really happening here, and why do I suspect
the White House has at least a second agenda?
-Anonymous
Senator Bernie Sanders (I-VT)
Bernie Sanders (I-VT) has been reading letters from middle class families on the
Senate floor. Here's some samples:
A mother and father in rural Vermont: "Due to increasing fuel prices we have at
times had to choose between baby food/diapers and heating fuel. We've run out of
heating fuel three times.. The baby has ended up in the hospital with pneumonia
two of the times."
A man in north central Vermont: "As bad as our situation is, I know many in
worse shape. We try to donate food when we do our weekly shopping but now we are
not able to even afford to help our neighbors eat. What has this country come
to?"
A mother: "By February we ran out of wood [for the wood stove we use for heat]
and I burned my mother's dining furniture. I have no oil for hot water.. We are
certainly a country in distress."
A 55 year old man: "I have worked since age 16. I don't live paycheck to
paycheck, I live day to day.. I can see myself working until the day I die.. I
work 12 to 14 hours daily and it just doesn't help.. I am just tired, the harder
that I work, the harder it gets."
A man in a small town: "I have what I used to consider a decent job, I work
hard, pinch my pennies, but the pennies have all but dried up.. I began selling
off my woodworking tools, snow-blower (pennies on the dollar), and furniture
that had been handed down in my family from the early 1800s, just to keep the
heat on. Today I am sad, broken, and very discouraged."
A woman from Northeast Kingdom: "I have always been a big pusher of 'if you can
do something to change your situation, do it'.. [But] it seems like every time
[my husband and I] do the right thing and try to move ahead for our family,
something out of our control happens in order to slap us back down.. We now find
ourselves unsure if we will be able to pay for both the mortgage and our oil
next winter."
A working mother of two: "I spend around $150 per week at the grocery store and
trust me when I say I don't buy prime rib.. Some nights we eat cereal and toast
for dinner because that's all I have. My family has had to cancel our annual
trip to the zoo, and we make less trips to see our families in another town due
to the increase of gas."
A 71 year old man: "I have been retired since 2000. With the price of fuel oil I
have been forced to go back to work just to heat my home and pay my property
taxes."
A teacher: "The middle class is no longer the middle class.. I've slipped into
the lower class after a winter of double heating costs and now these new
economic hits."
Wife and mother of two: "People that I know that have never struggled with money
are now frequenting our local food shelf so they can feed their families staple
foods! Please listen to our pleas and put ethics first!"
Bernie Sanders notes the following:
"When you talk about the collapse of the corporate media in terms of
responsibility," he says, "it's not just the War in Iraq. The other huge story
that they have missed is the collapse of the middle class - the fact that we
have tens of millions of people working longer hours for lower wages; that we
have the highest rate of childhood poverty in the industrialized world. For the
first seven years of the Bush administration, [the media was] simply the
stenographers for what the President was saying:
'The economy is robust. We have strong economic growth. Unemployment is
reasonably low.'
The metaphor is - it's like the operation was a success but the patient died.
The economy is doing great, except for 90% of the people in the economy. The
reality is that we have the hollowing out of the American economy. Median family
income declined by $2500 in the last seven years. 8 million people lost their
health insurance. 3 million people lost their pensions. This is a strong
economy? You've gotta be insane to believe that. And yet that is what the Bush
Administration was talking about and that's what the corporate media kept on
talking about."
http://www.afterdowningstreet.org/node/34845
So, the McCain campaign thinks these economic sorrows are just in people's minds
and that people are whining? I wonder why the taxpayers pay the salary of
clown's such as McCain? We have to end the costly Iraq occupation, fix the
broken financial system, stem the tide of home foreclosures and create good
paying jobs. McCain is not up to the task. Obama for President in 2008!
-Robert Scardapane
PORTRAIT OF A PANIC
by Victoria A. Brownworth
copyright c 2008 Journal Register Newspapers, Inc.
Nearly every day some pundit on the business news tells us that the U.S. is
“nearing” recession with “possible” inflation.
Not where I live. Where I live–lower income lower Germantown in Philadelphia,
which is the poorest city among the top ten largest cities in America–recession
hit hard about two years ago and inflation has been slamming us ever since.
I also wonder where the people predicting the “possibility” of inflation shop
and buy their gas.
Or where they live, because according to a report released June 23rd, the
housing slump is the worst in 50 years. The worst since the post-World War II
housing boom went bust.
Foreclosure rates are up 75 percent since 2007. They are the highest since the
Great Depression.
In fact, it is the housing and credit crises which concomitantly sent the
economy into free fall. The years of the Clinton Administration were the best
economic times since the end of WWII. Then came the dot com crash with the Bush
Administration, followed by 9/11, starting two wars, Hurricane Katrina, a
runaway giveaway by the Bush Administration in corporate welfare and tax cuts
for the wealthy and voila: we have an economic crisis.
To be fair, not all of this was the fault of the Bush Administration. Economists
note that 9/11 and Katrina wrought havoc on the economy and these were both, in
essence, acts of God. Katrina was a hurricane and 9/11 an act of religious
terrorism.
But the rest was policy, pure and simple.
On July 11th a scene straight out of 1929 could be witnessed in California.
Investors and depositors lined the streets outside IndyMac Bank, each hoping to
withdraw as much money from their accounts as FDIC insurance would allow, while
wondering where the rest of their money would go.
The FDIC (Federal Deposit Insurance Corporation) took over IndyMac after alarmed
depositors, hearing that the bank was in crisis, made a run on the bank July
7th. IndyMac had assets of more than $32 billion, but depositors withdrew $10
billion within three days, effectively crashing the bank. A spokesperson for the
FDIC said it could take several years before the FDIC could address all the
customer claims from the bank collapse.
Under the FDIC, investors are covered for up to $100,000 in savings or other
bank accounts. IRA accounts are covered up to $250,000. Financial advisors note
that no one should, given the current economic climate, have more than $100,000
in any one bank. While IndyMac isn’t well known on the East Coast, it was a
formidable institution on the West Coast. IndyMac is the largest regulated
thrift bank to fail and the second-largest financial institution to close in
U.S. history. (Thrift banks are banks formed as a depository primarily for
consumer savings. Savings and loan associations and savings banks are all thrift
institutions.)
Like many other victims of the greed that followed the mortgage loan boom and
bust, IndyMac foundered after the subprime mortgage debacle reached critical
mass in January 2008. Much of its revenue had become dependant on subprime
mortgages.
Now the bank is being controlled not by its investors and depositors, but by the
federal government. Depositors can file claims for part of the share of sales of
any assets from the bank, but few will see recompense of their entire savings in
the bank. Over 300,000 deposit accounts were on file with IndyMac. Of those,
more than 10,000 were in excess of the FDIC insured limit.
The FDIC says 50 other banks are in the same critical condition as IndyMac was.
Freddie Mac and Fannie Mae, the government-backed mortgage lending corporations
that essentially bolster the housing market in America, are also in trouble.
On July 18th the Feds scrambled to try and pull both companies back from the
brink to prevent further collapse of the stock market and the falling dollar.
Most Americans who are not bankers, stock brokers or financial advisors know
only this: A dollar seems worth a lot less than it was a year or two ago.
That’s a correct assessment. The economic rules by which the Bush Administration
has been playing and by which it continues to play are gutting the dollar. Yet
the President continues to allege that the economy is good.
Economic standards for inflation exclude gas and food prices. That theoretical
view does not jibe with the reality facing majority America, however.
Listen to the news and it says gas prices are *on average* $4 a gallon. Gas
hasn’t been $4 a gallon in Philadelphia or New Jersey since Christmas. Maybe in
Texas or Oklahoma or other oil-rich states, but not anywhere on the East Coast
and on the West Coast gas has been closer to $5 a gallon for the entire year.
Last week General Motors announced it was scaling back yet again, after reaching
a 50 year low in car sales. No one can afford the big trucks and SUVs that have
come to dominate American highways over the past decade when oil was cheap and
before we were fighting two wars to hold onto oil caches in the Middle East that
we still do not control and which were never ours in the first place.
Oil and fuel prices have impacted food costs. Americans are paying between 20
and 30 percent more for basic food stuffs than they were a year ago. Produce
costs are even higher and are expected to climb right through the end of this
year.
Where did the economic mess begin?
Some might say it began with Ronald Reagan and his convoluted theory of
economics which stipulated that less government regulation benefits the economy
and that deficit spending is immaterial to economic growth.
John McCain still invokes Reagan as does, inexplicably, Barack Obama. Both are
dead wrong for thinking Reagan’s is a platform to follow. It was, to a large
extent, Reagan’s theories that got us where we are today.
If you read economists like the New York Times’ Paul Krugman or The Street’s Jim
Cramer, you understand Reaganomics means economic cataclysm.
De-regulation of banks and other institutions is what has taken us to the brink
of economic collapse. There are no runs on banks with strict regulation. The
fact is, were it not for the investment banks like IndyMac or UBS deciding to
become involved–deeply and irrevocably–in the subprime predatory lending schemes
which could only have happened through massive de-regulation, there would be no
subprime mess or concomitant housing and credit crash.
The U.S. is in a recession, no matter what the President says or some pundits
who are not actually economists say. New job growth is at its lowest point in 50
years. The housing market is at its lowest point in at least 30--some say
50--years as well. The dollar is worth less than any other serious currency
including the Canadian dollar and the Japanese yen, despite the fact that Japan
has been in the throes of recession for a decade.
The U.S. stock market was cresting toward 15,000 points exactly a year ago.
Today it hovers either slightly below or slightly above 11,000. That’s a huge
loss in a year’s time. How can Bush say the economy is thriving?
In Pontiac, Michigan last week Michelle Obama said that the $600 stimulus checks
Americans have been receiving were “only enough to buy a pair of earrings.”
Are any of our so-called leaders paying attention? Mrs. Obama can be
excused–barely–because she’s merely the candidate’s wife, not the candidate. But
a comment like that reflects serious ignorance of the plight of most Americans
who aren’t buying earrings with their stimulus checks, but buying food. And such
a comment doesn’t help the Democratic candidate lose the image of being elitist,
either.
What the candidates and all Americans need to remember is that the American
economy determines much of the global economy. China and India might be rising
economic powers, but it is still U.S. currency that propels the global
marketplace. If the U.S. economy is in free fall and deep and growing recession,
what does that mean for the world’s poorest people?
The current presumptive nominees have been talking a lot about everything but
the economy in the past week. Yet there is no more pressing issue for
Americans–or the world–than the U.S. economy. The perils of inflation are
manifold and the economic platforms of both Obama and McCain reflect a lack of
comprehension of what needs to be done to control inflation while also holding
back the full impact of recession.
Both economic platforms are flawed, taking in far less money than they give out.
One way to stop a huge financial hemorrhage is to end the war on Iraq. That war
has cost more than $700 billion to date.
Both candidates waiver on the need to balance the budget. McCain says it will be
done by the end of his first term. Obama says it’s not the most important
economic issue. Both are leaning on that old-time Reaganomic construct.
If you have a bank account and you don’t balance your check book, what’s the net
result? Bounced checks and mounting debt. That’s where America’s collective
checkbook is at present. The budget needs balancing.
There is no quick fix to the economic crisis the U.S. is currently mired in.
It’s easier to get into debt than it is to get out. But one thing is certain and
should be obvious–get out we must. Perhaps the husband of a wife who would spend
$600 on earrings or the husband of a wife who is an heiress don’t quite get what
the problem is. But for those of us who have known for a long time that we were
dealing with recession and inflation, even if we didn’t know what the terms
actually meant, leadership to bail us out of this economic morass is what we
need.
The question is, who will provide it? And when? Bush–and McCain and Obama–need
to look less to Reagan and more to FDR for the kind of fix we need to put
America and the economy back on track.
In response to the McCain campaign's sense that our poor economic standing is
all in our minds, Robert Scardapane sends this from Time Magazine:
"Americans are not simply dissatisfied with the economy. They are deeply
unhappy: 85 percent of respondents in a recent poll believe that the country is
on the wrong track."
http://www.time.com/time/business/article/0,8599,1823668,00.html
Does McCain still think it's all in our minds? We need a President that can
recognize a real problem. We need to elect Barack Obama.
In response to George Bush's, "I'm not an economist, but I do believe we're
growing," Pat Thompson writes:
That is the basic problem with our brand of capitalism -- there must be growth.
However, right now, there is continuing serious shrinking, which we all know
about, but apparently Bush does not. Sure, his friends in the oil industry are
doing fine, and Halliburton and KBR are doing great, thanks to no bid government
contracts. The pharmaceutical industry and prison industry are fine. But that
leaves out a lot of people. Forget growing -- how about just maintaining? And
even if you have a few "dollars", they are becoming more and more worthless --
that's why it takes more of them to fill your tank or your grocery cart.
Send your comments to: NationalView@aol.com
-Noah Greenberg