Where Are The Democrats?

It is becoming more evident each day that George Bush is a madman bent on throwing the world into chaos.

Fine.

But the Democratic Congress was elected to stop him.  It's a democracy, stupid!

Where are these elected representatives?

How supine, how lordotic can our country permit its elected representatives to be before we lose our national identity and our nation?

I, for one, no longer hold George Bush responsible for a single thing taking place in the world.  The Democratic Congress can stop him.  If they don't, it is their cowardice, not Bush's insanity that destroys us.

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Praying for Interest Rate Cuts

If you're sincerely worried about too many people getting jobs, we respectfully suggest you lighten up a bit.
--Alan Abelson in Barron's

The received wisdom is that the market swooned on Friday because the participants decided that there was a sufficient amount of good economic news to permit the Federal Reserve to keep interest rates where they are.

Interest rates are the price of money.  So this translates into the Federal Reserve keeping the supply of money where it is.

In addition, the Chairman of the Federal Reserve is famous for his focus on and determination to prevent deflation.

So, we can summarize.  Deflation is out of the question because:

A) Bernanke will never let it happen, and

B) It is only a matter of time before the Fed opens the monetary spigot

And nothing else matters:

The fact that the real estate market is imploding.

The fact that China holds a trillion dollars of our debt.

The fact that we are embroiled in a war for oil costing a billion dollars a day.

Allow me to close by asking the, perhaps theoretical, question: do the Chinese care about United States interest rates?

Why should they?

First, they directly affect income on the dollar-denominated debt they hold. Second, US interest rates control the value of the dollars they hold. So, even if Mr. Bernanke is tempted to cut US interest rates, his hand may be stayed by the Middle Kingdom. When you're in debt up to your eyeballs, you sometimes have to kowtow [http://en.wikipedia.org/wiki/Kowtow] to your creditors.

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The Deflationary Death Spiral Has Begun

Oil down.  Euro down.

Deflation is such a theoretical concept.  It should be called "Saving".

You save when you think prices are going down.  And, gosh almighty, they go down!

To prove me wrong, you have to point to an area where prices, in dollars, are going up.

Housing?  The stock market?  Try harder.

A key question: when US consumers get a taste of the benefits of not having to spend as much money on oil this winter, are they going to blow it all at the mall?   Not so much.

[We're still sinking on Friday. Guess people don't want to be long over the weekend. The theory that this is all an interest rate scare because of good economic news will certainly be put to the test. Hope it's right!]

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Confusion about the economy

I personally believe that 2007 is going to make 1929 look like a tea party, but that is irrelevant.

What is relevant is that if the economy craters in 2007, it IS BUSH'S FAULT.

We've had 6 years of pure Republican, doctrinaire control of the economy: the Administration, the Congress, and the Federal Reserve (Greenspan toadied to Bush like no Chairman before him has toadied to a President).

Tax cuts we couldn't afford, spending to subsidize the rich that we couldn't afford, interest rates that blew a hole in our equity markets, and a billion dollars a day to fight a losing war.

IF THE ECONOMY CRATERS IN 2007, IT IS BUSH'S FAULT.

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The Party of Impeachment

The Republican Party is the party of impeachment.

Impeachment.

They impeached Bill Clinton for fellatio.  Technically for lying about fellatio, but considering that if they could have proven he lied about a parking ticket, they couldn't have impeached him, we have to admit it was an impeachment for fellatio.

The party of impeachment.

Hearings, my friends, won't cut it.

On the other hand, the Bush Administration is already over.  Yes, he will kill as many people as he can, because that is all he knows how to do, before the he leaves the White House.  But his Administration is over, and he knows it.

He wants headlines.  He wants them really badly.  The reason for the delay in the "IRAQ DECISION" is that he realizes he doesn't have that many more headlines left.

Give him the best headline of all: "BUSH IMPEACHED".

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Commander-in-Chief Custer

Impeach George Bush and Dick Cheney now.  Yes, I admit that neither of them has lied about fellatio in the White House.  We will have to lower the bar.

But 3,000 dead American servicemen and women deserve to have their memories honored by the impeachment of the individuals who sent them to their graves unnecessarily.

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The Nuclear Option

Readers of my previous post will note that I have said that the Decider doesn't have any options except to follow the proposal of The Iraq Study Group by engaging Iran and Syria in a dialogue.

Not so.

Thinking about it, I find that there must be a growing belief the Decider's bird brain that he must use

The Nuclear Option

What would it entail?  Well, rest assured that Iran's nuclear facilities are in the middle of population centers.  So, it would entail perhaps a Hiroshima and a Nagasaki.

Benefits:

1) the Decider gets to think for a few moments that he will go down in history as the Leader Who Won the War on Terror

2) Israel gets to believe that the sin of half-way measures committed in their bombing of Beirut has been expiated

3) "moderate" Sunni governments such as Saudi Arabia and Jordan get to breathe easier with the knowledge that the threat of Iran has been eliminated

Risks:

1) 1), 2), and 3) above are bullshit.

2) Pakistan's nuclear weapons fall into the hands of Al Qaeda (no friend to "moderate" Sunni governments)

3) Iran's power is in no way diminished, unless you want to call the deaths of a million civilians as a dimishment of power

4) Oil becomes unobtainable in the Middle East as the government in Saudi Arabia falls, etc.

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A Moderate Shiite Government in Iraq

The Bush administration is also working on a way to form a coalition of Sunni Arab nations and a moderate Shiite government in Iraq, along with the United States and Europe, to stand against "Iran, Syria and the terrorists," another senior administration official said Tuesday.

from http://www.nytimes.com/2006/12/13/world/ middleeast/13saudi.html?ei=5094&en=9 b8923e7095544b1&hp=&ex=116607240 0&partner=homepage&pagewanted=pr int

Where to start?

In the first place, if Israel and Saudi Arabia wanted a moderate Shiite government anywhere on earth, they should have put a ton more troops into southern Lebanon to defeat Hezbollah.  With the passing of that "opportunity", I would say that the whole concept of a moderate Shiite government anywhere on earth has gone by the boards.  Bombing Beirut will probably go down in history as the worst mistake made by a national government in the 21st century.

In the second, where will the troops come from to invade Iran?  The United States?  Israel?  Saudi Arabia?  Britain?  Pakistan?  Sure, Iran can be bombed, but bombing Iran would destabilize Pakistan...wouldn't it?

In the third, the Decider has been presented by the Iraq Study Group with the only remotely conceivable way out of the mess he has created: dialogue with Iran and Syria.  He doesn't have any "options", but he persists in believing that he does.  As long as that goes on, the United States sinks further and further into the morass.

The American People?  Kind of forgotten in all this talk about Saudi Arabi, Israel, Iran, George Bush, etc. etc.  Well, the American People would do themselves a tremendous favor by a double impeachment.  The quickest way out of this is to impeach Bush and then Cheney.  Unprecedented, but called for.  Incredible, but necessary.  Unlikely, but worth praying for.

 

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A Note on Inflation and Deflation

Recall that during the Great Depression, most people were not complaining that the necessities of life cost too little.  On the contrary, people were starving to death.

Yet, I believe it is universally accepted that the Great Depression was a deflationary event.

These two points highlight the fact that inflation and deflation refer to the amount of money in circulation, not to prices.

I suppose there are subtleties.  Devaluation comes to mind.  But I believe the principle is correct.

The magnitude of substandard mortgage debt today dwarfs, in constant terms, the magnitude of margin loans prior to the crash in 1929.

Where did that debt come from?  Craven, unscrupulous bankers trying to subvert their customers with unpayable loans?  Let's be serious.  The debt was the natural outgrowth of the Federal Reserve's policy of keeping interest rates artificially low to pay for the Iraq war.

With the appointment of Bernanke to the Federal Reserve, the Iraq war lost a key constituent.  With the election just past, it lost another.  It is still alive and still kicking, but in 2008 it will lose another.

The only problem is that the United States will have lost its way in the world by then.

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What Do These Men Have in Common?


"It's sort of hard to suddenly say everyone agrees Baker is the way to go when the leading Republican candidate for '08 is saying no," said William Kristol, editor of the Weekly Standard.

"It's preposterous, period," said Kenneth R. Weinstein, chief executive of the conservative-leaning Hudson Institute, about the proposal for a new dialogue with Iran and Syria. "Talking to them is not going to bring anything but a perception of American weakness."

"The report is a monumental disappointment, for all the hype," said Richard Perle, a former Reagan-administration defense official who strongly supported the Iraq invasion. "The recommendations are either wrong or of no consequence. There is no magic bullet, but in their desire to find something, they found the wrong things."

Michael Rubin, a former Pentagon aide who resigned in protest from an Iraq Study Group expert panel, said he believes Baker's assessment is unrealistic. He said that Syrian President Bashar al-Assad gains strength from positioning himself as a rejectionist and foe of the United States, so it is wrong to believe that Syria would think it would gain from an alliance with Washington.

"Sometimes realists have to deal with reality," said Rubin, now a scholar at the American Enterprise Institute. "Iran and Syria will press to exploit every advantage they have."

He said the report, as a strategy document, was a "Cliff Notes high school paper."

Eliot A. Cohen, a Johns Hopkins University professor of military strategy, said the Baker-Hamilton recommendations reflect "preoccupations that go back to when [Baker] was secretary of state and are completely detached from today's reality. The idea that Sunni are putting power drills in the heads of Shia and vice versa because of the Arab-Israeli conflict is bizarre."

They were the conservative leaders, quoted by the Washington Post, opposing the Iraq Study Group Report.

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Diaries

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