In a tightening economy, with rising fuel and grocery prices, what products and services are going to be the first to feel the squeeze? Will consumers give up their three-dollar lattes, or concerts, or online music subscriptions? Or will they scramble for more ways to extend their run? Will they open new lines of credit wherever possible, maxing out their plastic and dipping into rainy day and retirement funds?
Such predictions are nearly impossible to make reliably. But if we run on the assumption that in the aggregate, consumers will actually tighten their collective belt, it seems prudent to take a stab at guessing which industries will suffer the most. There is some indication already that retail and the home improvement industry is turning south as foreclosures and lines of credit shut down—but what else will take a hit? In other words, when eating becomes too expensive, and the credit cards are tapped, where will consumers make their budget cuts? Here are a few of my guesses:
• Travel. The dollar is dropping like a stone against every other currency in the world—so scratch the big vacations to Europe, Asia, Africa, or the Galapagos Islands. Canada used to be a poor man’s foreign destination in such trying times, but the $US is at thirty year lows there, too. American’s will stay home—and they won’t even drive very far. Gasoline prices continue to climb, and for those consumers that lacked the foresight to buy economical transportation when credit was easy, their Navigators and Explorers and H2s will remain relegated to essential trips—to the grocer and work. (in a tightened credit environment, throw auto dealers into the well also) Airlines dependent upon tourism will continue to be unprofitable. Theme parks like Six Flags or Disney? I wonder how many consumers will be able to justify spending hundreds of dollars for what amounts to a day of silliness and thrills that you can get on a bicycle.
• Coffee. I have been astounded at the success of Starbucks and its imitators over the last two decades. A sure sign of perceived prosperity is when consumers are willing to spend three dollars every day on a commodity that costs twenty cents (or less) to make at home. I expect that we’ll see corner coffee shops evolve or shut down in the next few years. In a slightly related vein, we’ll see organic choices at the market much more rarely. Earth-love is fine when times are good, but in tough enough times even Ed Begley Jr. will eat the last spotted owl with a side of pesticide-laden, genetically modified French fried potatoes.
• Education. Will this be the economic contraction that finally has Americans rail against the high cost of education? I think so. It now costs hundreds of thousands of dollars to get an advanced professional degree from private institutions—more if you amortize the costs for several years after graduation. State schools approach the numbers more closely all of the time. Expect backlash. Community colleges, with their smaller classes and lower costs, will fill some of the gap, but they are already stretched, so less of the poor will be going to school. And what of elementary education? Will Americans who have chosen to send their children to private schools shift them to the thriftier choice of public schools? I think so, and this will put a sharper focus on our crumbling public education system.
• Media sources. These are another handful of examples of too much money for too little return. I think consumers will trim their movie rentals, their cable television, their video gaming, and their web access (Print media is already dead—no need to add it to the list). Basic cable will rule, and broadcast radio will become a better venue for advertisers that at any point in the past three decades.
• State, Local, and Municipal Services. Congress issued a report last week that showed the fallout from declining property values—ALONE—will result in about a billion dollars in lost property tax revenue for small governments in the next year. I believe their report was optimistic, and that they can add at least one zero to the number. Throw in lost sales tax revenue (in the many billions) and excise taxes for vehicles and such, and you’ll have a genuine crisis for local governments. What will they cut in the face of such austerity? Their biggest costs are education and health care for the poor—and public infrastructure. Cuts will hurt all three of these, but expect health care and roads to really suffer.
This is not an exhaustive list, just what I could think of over a cup of (home-brewed) coffee, and then post with my too-expensive high-speed internet connection. The next important question is; what will these changes do to the American economy? The unfortunate reality comes down to what economists call the multiplier effect.
Macroeconomic theory holds that the entire economy is a circle of exchanges. Employers (firms) pay workers, workers buy products, products come from the firms. Banks lubricate the whole process by providing liquidity (loans) so that firms can expand and take risks. If enough risks work out, the whole economy (Gross Domestic Product) grows. Central Banks can add or subtract liquidity (but not necessarily change GDP) with very minor adjustments to the closed loop of the economy. William Greider, writing in his outstanding work on the Federal Reserve (Secrets of the Temple: How the Federal Reserve Runs the Country, 1987, Simon & Schuster), likened the loop to a closed set of plumbing. Even a small addition of water to a closed system is felt immediately throughout the system.
It works (in an oversimplified way) like this: The Fed sets a target funds rate in their meeting—say a quarter of a percent lower than the current rate. This is an order to release more bonds (via auctions) onto the market, which dilutes demand for them, driving their effective yield down. As a result banks now have, on paper, more “cash” reserves. With more reserves, they can make more loans—because only a percentage of their loans have to be backed by reserves. Currently, US regulations require 10% cash reserves, so for every dollar that the central bank pumps in, ten more are added to the aggregate liquidity of the economy. But wait, were not done—that extra percentage of dollars adds to bank reserves as well! (It’s a circular model, you know…) So that percentage is multiplied into the economy’s overall liquidity: Repeat this cycle until the addition can only be measured in fractions of a cent. This is the multiplier effect, all from the Federal Reserve deciding to lubricate the market a little—no actual money is printed.
The problem is the multiplier also works in reverse. Tightening of liquidity shocks the entire system in the same ratio as loosening. Did I mention that the Fed can only add little changes—and that some market forces are beyond their control? Such is the case I believe we’re seeing now. The Fed can add liquidity all they want (I’m betting on a 25 basis point decrease in target at today’s meeting), but market sentiments still rule. When investors and banks believe they’ll need every bit of their reserves and then some to cover their bad bets, they don’t make the loans. Consumers feel this—the rates they pay on plastic go up, the spending caps come down, and their employers tighten belts as well (Maybe this year’s Christmas bonus is you get to keep your job…)—and adjust their habits, perhaps in the ways I’ve outlined above.
This means less of everything—less buying, less eating, less education, less taxpaying. This in turn means less road maintenance, more crowded classrooms, more automobile sales-of-the-century, and better incentives to purchase HBO. But if sentiment doesn’t turn right away—if consumers feel like this is going to be a long ride, the multiplier kicks into high gear. And remember, the Federal Reserve has less than five percentage points with which to play (barring negative rates, which Japan tried to no effect in the 1990s)
More loan and credit card defaults mean tighter money still. Housing may lose 40% of its perceived value, but still no buyers. Coffee at Starbucks might drop to $1.50, but who’s going to drink it when every penny counts? What I am talking about is deflation—and you won’t hear serious economists mention it in anything but a very quiet whisper, out of earshot, because to say it aloud is to increase its possibility. Like inflation, deflation is all about emotion, sentiment, gut feeling. None dare speak of it, lest it hears the beckon and visits.
We had serious deflation only once in the last one hundred years. It arose from World War I, and eventually became the Great Depression. The worldwide fundamentals are different now, with foreign GDPs growing robustly. Nonetheless, our nation owns 13.8 trillion dollars of world production—we matter. I truly hope that wisdom and coolness prevail, but I tell you now that I will experience only mild surprise if they do not.
NOTE: My loose-brained analysis may have several flaws—I wrote in a flurry.
Cheney is exploiting a Constitutional vulnerability in the separation of powers, initially brought on by the afterthought of the Founders. When they met in Convention in 1787, they needed to determine what role, if any would be played by the VP, who in the unamended Constitution was the presidential candidate that garnered the second highest elector vote totals. In other words, the President's strongest opponent in the General Election would be his Vice President. Wondering what else to do with the office besides fill it with the loser, the Framers threw out a bone--make the VP the President of the Senate. Otherwise, framer Roger Sherman of Connecticut said, "he would be without employment."
Fast-forward 15 years after ratification, and Twelfth Amendment allows for the President and Vice President to be of the same party, as a ticket. This removes the somewhat trivial check against Executive power that existed in the form of an adversarial leader in one house of the Legislative Branch. What this all means is that the Office of the Vice President of the United States has a muddled definition. On one hand, the VP is a member of Executive Branch, ready to have the full power of the Presidency conferred to him or her via succession. (See Amendments XII, XX, and XXV, as well as the Presidential Succession Act of 1947 3 U.S.C. § 19) On the other hand, the Vice President acts in a legislative capacity, even casting the tie-breaking vote in the very important US Senate.
Until Cheney, the fuzzy ground occupied by the VP between these two branches of government was largely ignored. Harry Truman came into the Presidency without having been briefed on some of our most important strategic aims--and that was during a war of some import. LBJ and Kennedy weren't known to be best friends, and Gerald Ford--well we know how he got the job. But only when Reagan's brain started taking an early retirement in the first years of his two terms was the VP's importance even vaguely realized. At that time, the VP was most assuredly running many covert programs for the administration, and it seems likely that the boss didn't even really know about them.
Cheney was right there at the time, studying and learning. "Aha!" he must have thought, "The VP wears two hats, and this means that he can avoid accountability." So in 1999 and 2000, W went ahead with Cheney's plan. They acted as if Cheney was looking for a running mate for the GOP candidate, when all along, the intent had been to find a Presidential candidate malleable enough for soon-to-be VP Cheney. They got their stooge in W, and the rest is just so much sad history.
Now when the pressure is on, Cheney can alternately claim exective priviledge and executive exemption from the law of the land. Clever, deceitful, brilliant, and disgusting all at once. The saddest part is, there isn't any really good case law, that I am aware of, to counter his claims. By the time this plows through the Supreme Court, with all of the obfuscation and misdirection that crew can muster, we're going to be even more fucked than we are now. I know that is a mighty big claim, but these guys have yet to disappoint on the fucked-up scale.
I've been trying to compile an accurate account of how many servicemen and women have died under each US President. The rankings, which are incomplete, come out this way for the top-10:
1 Abraham Lincoln/Jefferson Davis 623,026
2 Franklin D Roosevelt 357,316
3 Woodrow Wilson 116,708
4 Harry Truman 86,954
5 Lyndon Johnson 35,957
6 Richard Nixon 22,401
7 James K Polk 13,283
8 George W Bush 3,870*
9 William McKinley 2,446
10 James Madison 2,398
As you can see, GW Bush has a long way to go to catch up to #7, James K Polk. Polk, as you'll no doubt remember, led us into a war on Mexico over, er uh, I dunno, a Hemispheric War on The-Bastards-Who-Want-Their-Land-Back. Later, Congress appoved a memorial mentioning, "A war unnecessarily and unconstitutionally begun by the President of the United States." (Thank #1 on the list, old Honest Abe himself, for that little bomb) Anyhoo, GW better get movin' if he wants to rub a little extra salt in Poppy's eyes (a dismal #13 at 553 KIA).
That said, W now finds himself tied for #1 in one other important statistic--Most Years with 500 or More US Personnel Killed.
1 Lyndon Johnson 5
1 Richard Nixon 5
1 George W Bush 5 *
4 Abraham Lincoln/Jefferson Davis 4
4 Franklin D Roosevelt 4
4 Harry Truman 4
4 James Madison 4
8 James K Polk 3
8 Andrew Jackson 3
10 Woodrow Wilson 2
The little Bush shares the honor with LBJ and Tricky Dick Nixon, who each spent 5 years justifying the pointless war in SE Asia (although to be honest, each of them might not have made the 500 mark every single year--LBJ started kinda slow, and the Dickster had other troubles in 1974...) No matter, if next year's pace matches this year's torrid upticks (and it will, thanks to a Democrat-controlled Congress), 2008 will have the undisputed warfaring-est President EVER taking over the top slot, sometime around April.
Damn shame--and I knew it was coming in 2000, sometime in December. I locked in on that opinion when he got inaugurated the first time, and I swore it looked just like one of those Nazi rallies Hitler so loved. This piece of doo is also taking over the top ranking for greatest builder of Constitutional crisis, edging out a feckless James Buchanan. I didn't see THAT coming...
But as Lily Tomlin says, "No matter how cynical I get, I find I just can't keep up"
Posted by kurtyboy in General Discussion: Presidential (Through Nov 2009)
Thu Mar 15th 2007, 10:22 AM
“Deriving their just powers from the consent of the governed”
Our entire Republic is based upon this bedrock—that “we, the people” provide legitimacy to a government if and only if we consent to be governed. And implicit in the notion of consent is the idea that it may be revoked. In our republic, consent takes material form in the franchise—we vote for our representatives, and they in turn appoint the officers of our government. If those representatives or officers fail, we may remove them through political action. We the people are the ultimate check on our own government.
But in the government today, there is a disturbing pattern of attempting to lay blame at the feet of unelected officers and leave it at that.
When a CIA agent’s name was leaked to the press, jeopardizing not just her life but the security of our nation and the world, only one conviction came about—the Vice President’s Chief of Staff. The Vice President retained his job.
When our Congress provided the President with authorization to make war in Iraq, they did so while citing intelligence collected and shaped by unelected officials. Tenet, Wolfowitz, Rice, Powell, and Rumsfeld created a case that Congress found compelling enough. Four years on, when the case has crumbled under its own weight, nobody in the list above has suffered serious indictment. Rice and Wolfowitz found better jobs; Rumsfeld and Powell retired into comfort; and Tenet received the Medal of Freedom. In Congress, Clinton, Kerry, and Edwards all became front-running presidential candidates. Of the Senators and Representatives who voted for the Iraq War Resolution, only a handful lost their reelection campaigns.
When an unprecedented United States Attorney massacre occurred last year in a brazenly partisan assault on the separation of powers, Attorney General Alberto Gonzales only took full responsibility while simultaneously fully ducking it. The sole job lost so far—Kyle Sampson, the AG’s Chief of Staff—is two levels removed from the gaining elected official, the President. The President says he has faith in the AG, and leaves it to Gonzales to make nice with the Congress that confirmed him.
The same scandal has at its center legislation made a part of the reauthorization of the USA PATRIOT Act. A passage in the reauthorization circumvents the checks built into the Constitution by allowing US Attorneys permanent appointment free of the legislative confirmation process. The passage was put into the reauthorization under the authority of Senator Arlen Specter. As documented by Dahlia Lithwick at Slate, Specter explains:
"I then contacted my very able chief counsel, Michael O'Neill, to find out exactly what had happened. And Mr. O'Neill advised me that the requested change had come from the Department of Justice, that it had been handled by Brett Tolman, who is now the U.S. attorney for Utah, and that the change had been requested by the Department of Justice because there had been difficulty with the replacement of a U.S. attorney in South Dakota."
Thus, at least according to Specter, O'Neill had merely been following orders from the Department of Justice when he snuck new language into the Patriot Act that would consolidate executive branch authority.
O’Neill still works as Senator Specter’s Chief Counsel. Senator Specter remains as powerful as ever.
Again and again, blame gets shifted away from elected representatives and to lower-level officers, but the scandals continue unabated. To paraphrase Lily Tomlin, no matter how many injuries to the Republic we imagine, we find we just can’t keep up.
At the center of everything is one Karl Rove. Neither elected nor subject to Legislative confirmation, Rove’s name surfaces prominently in every one of these and now countless other scandals and breeches of Constitutional propriety. Rove has remained nearly untouchable; even while speculation that he would be indicted in the CIA leak case swirled around the Capitol. Sidney Blumenthal, writing for Salon, notes:
"Karl Rove is the rightful heir to Nixonian politics. His first notice in politics occurred as a witness before the Senate Watergate Committee. From Nixon to Bush, Rove is the single continuous character involved in the tactics and strategy of political subterfuge."
</snip> http://www.salon.com/opinion/blumenthal/20... /
If this President cannot see fit to remove Rove, then our Representatives have a Constitutional responsibility to impeach and perhaps (subject to the findings of the impeachment) remove the President. If they do not have the will to impeach, then we the people have a responsibility to remove and replace our representatives. It is the only way our Republic can survive this latest season of witches.
Accountability ultimately rests at our feet, and we ought to get on with it.
January 2007 marks the first calendar month since July 2002 that no US servicemembers were reported killed in Afghanistan.
Its not even identifiable as a tunnel, let alone looking for a light at the end, but at least something good can be said.
The month also saw six "good" days in Iraq, where no coalition forces were killed. While that is much better than the 2 days in September 06, and the three each in October, November, and December; it sadly falls well short of the January average of 10 good days, and the overall monthly average of 6.8.
No records are available to me, but I suspect the Iraqi people haven't had a really good day in many, many years.
Posted by kurtyboy in General Discussion: Presidential (Through Nov 2009)
Wed Nov 08th 2006, 04:25 PM
Hubris made itself obvious to George W. Bush yesterday, and he’s only a few thousand days behind the rest of us. Hubris happens to people who do more than acknowledge a distinction between right and wrong. Hubris is what happens when people just KNOW which aspects of the world fall on which side of the right-wrong divide—only to later find that they can be miserably mistaken. Hubris creates costly inevitabilities.
Make no mistake; the War in Iraq is the naturally-occurring, utterly unavoidable consequence of the moral righteousness of the modern conservative movement. The black-and-white, absolutist worldview adopted by GOP adherents as a way of attracting “values voters” painted itself into the ideological corner of, “It is imperative that we stop talking and do something about evil in the world.”
The only real question was, what forms would that something take? Would the party of conservatives press into law measures that would punish abortion providers? Or stiffen penalties for drug possession even further beyond the draconian levels now in place? Or make Biblical indoctrination a mandatory facet of public education? All of these possibilities were nibbled at in local forms, but none seemed to survive the test of broader general acceptance.
No, these options would not do, because they required agonizingly cumbersome processes of consensus-building, deliberation, and compromise. You know, “Democracy.” Another option had to be found, one that allowed for action to be taken with the least amount of hemming and hawing, and forced dissenters to keep their democracy-holes shut over process, which after all, is talking about doing something, and not actually doing something.
Once all of the options about which something could be done were evaluated, the GOP and this President chose the one that accomplished their most valued strategic objective—an open war and the destruction of a government sitting atop ten percent of the world’s oil reserves. At last, the elusive something was found, and the right could make it their rallying point for as long as the truth about war—any war—remained cloistered with the assistance of embeds, liars, and insatiable opportunists. Eventually the truth would out—certainly—but (presumably) not until the major strategic objectives had been accomplished.
On 11 September 2001 Mayor Rudy Giuliani was asked for an estimate of lives lost in the tower collapses. He would not give a number, but did say that the losses would be, “Too much to bear.” By the end of this coming January, US war deaths will exceed the 911 death toll—demonstrably too much to bear for the voting public. The truth did out.
That said, I have to give the President and his team of corruption some credit: They held that hubris hill for much, much longer that I would have thought possible in anything but an out-and-out dictatorship. They managed the Pentagon, Homeland Security, and the press (and the Justice Department, and internal dissent, etc.) in a way that would have made Uncle Joe Stalin proud, and all at the cost of just a few thousand American lives—volunteers, no less! Control of the oil fields is nominally westernized, and we appear likely to have a military presence in the region for many years to come. The door has been opened for an expansion of hostilities against other regional powers.
But today I also have to give the American electorate credit I thought I might never have a chance to award. They have used a constitutional method to put an end to the hubristic vision of the right wing and the neoconservatives. Things may not change quickly enough for our tastes, but we can at last be assured that the words, “Not in our name,” will ring out with the clarity, volume, and force that the founders dreamed about when they wrote checks on power into our Constitution. The public did this in the face of the most effective propaganda machine ever assembled in this nation; they did it in the face of seemingly insurmountable party discipline.
They did it in spite of redistricting, and voter-suppression, and illegal wiretaps, and dirty opposition research, and vote tampering.
They did it because it is their job to check hubris. It is their job to remind not just the President, but all of us, that ours is not a Republic which allows for personalities to dictate our collective vision. Ours is a Republic of laws.
After what seemed like an interminable journey into the wilderness of despair, my hope that we can, “Let America be America, again,” is gloriously, vigorously restored. Let us now get back to the hard work of consensus-building, deliberation, and compromise.
As of this morning, over 3000 men and women of the United States' armed forces have been killed in Bush's "Global War on Terror"
2,666 in Iraq, and 335 in Afghanistan theater operations.
NATO's Commander in Afghanistan is calling for reinforcements, and Iraq occupation troop level's are alm,ost as high as they were at the start of the conflict.
No US President will ever again be able to utter the words "Mission Accomplished" in public--Bush has ruined the phrase for all time.
Meanwhile, Pakistan (with us AND against us, it seems) has negotiated a deal to re-arm and provided safe haven to the Taliban. Osama bin Laden will be safe so long as he lives like a "peaceful citizen."
Iraq has degenerated Exactly to where Iran has wanted it for over two decades, and North Korea's ambitions have sparked a resurgence of militarism in Japan, a nation that can build a seriously threatening nuclear arsenal quicker than you can say Afghanistan Bananastan.
And the price has been paid with American blood, and limbs, and eyes, and psyches. 901 wounded in Afghanistan, 19,945 wounded in Iraq. Countless cases of PTSD still coming....
At current loss rates:
US losses in Iraq alone will equal the 911 losses on February 1st, 2007.
Coalition Iraq deaths = 911 deaths on October 10th, 2006.
US Iraq deaths = 4,000 on or about June 3rd, 2008.
Coalition GWOT deaths = 5,000 on or about May 29th, 2008.
Election Day (Nov 4) 2008, US GWOT losses = 4,819.
Election Day (Nov 4) 2008, Coalition GWOT losses = 5,411.
Inauguration Day (Jan 20) 2009, US GWOT losses = 4,997.
Inauguration Day (Jan 20) 2009, Coalition GWOT losses = 5,610.
But, as Tony Snow points out, these are numbers.
Nothing. To. See. Here.
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