It's the Dollar, Stupid!

On Tuesday, March 4th's Thom Hartmann program on Air America Radio, there was another moment of sanity that I would like to share with you guys. If you'll remember, on Tuesday, just about everyone was talking about the mini-Super Tuesday primary (naturally!) and the campaigns of Hillary Clinton and Barack Obama (especially the 3am phone call ad. It was quite the twist in the storyline!). Thom Hartmann spent the first two minutes of the show expressing concern that one campaign has gone negative (and he actually made an interesting point, although I don't have the time to transcribe it. You can listen to that specific show for $2 at Air America's website - although the first hour was really the only 'worth the money' part of the show that day, in my opinion. And no- I'm not getting paid to say this.)

But then he said this...

(To let you know, I've changed the language a bit just to make it easier to understand. People speak a lot differently than they write, and do strange thing with words such as "and", "like", and "you know". We also tend to go off on tangents. In places where you see '...' it means I cut out some words unnecessary to the point being made. Things in regular parentheses were added by me because you need to know this stuff to know "storyline". When you see these [ ] around something, it means I've moved this sentence from somewhere else where it makes a bit more sense. The changes are minor, but if you don't believe me, as you probably shouldn't, feel free to check by listening to the show. I'd like to know if someone has a problem with my edit. Feel free to tell me in comments. Keeps me accountable to all of you, which keeps me honest.)

The larger issue, frankly, that concerns me is the economic one. The economy of the United States of America right now. OPEC is meeting as we speak...and the general guess/consensus is that they are probably not going to cut production and they're not going to raise production. The net effect of that- this is from today's Financial Times- "oil hit a record close of $104 a barrel yesterday as the dollar plunged and expectations hardened that OPEC ministers will leave production unchanged when they meet in Vienna tomorrow"... The oil minister of Libya said, "The world has changed. The dollar is down. A hundred dollars is not what it used to be."

And that's the bottom line.

The oil producing countries, the gold producing countries, the copper producing countries, the platinum - I mean, you name the commodity- wheat, rice - right across the board. Anything that is denominated in dollars right now is going up in price. Because what's really happening is not that these things are going up in price. It's not that when Bush came into office oil was 30 bucks a barrel and now its $100 a barrel. It's that when Bush came into office, $30 was worth a barrel of oil and as Bush is leaving office it takes 100 of those pieces of paper that we call 'dollars' to buy a barrel of oil.

The value of our currency is being destroyed by this administration and for a very simple reason. It's because Bush has subscribed to what his father referred to as 'voodoo economics' - Reaganomics. We are watching Reaganomics destroy the currency of the United States. Destroy the economy of the United States. Frankly, I'm starting to get very, very concerned.

This is not a "Hey, run for the hills" kind of rant. I'm not suggesting that at all. No matter what happens we will get through it. We got through the Great Depression, which was pretty bad.

But... My buzzflash.com book of the month... is called Bad Samaritans. It's about how these economic actors- the IMF, the World Bank, the WTO and the believers in, basically, the economic theories of Milton Friedman, Friedrick von Hayek, Tom Friedman - "The Olive Tree and the Lexus", The World is Flat- these people with these economic policies are wrong. No country has ever built itself to be strong without using protectionist measures and without keeping its currency strong. It has always worked that way. These guys come along- and as I've said, it went on steroids with Ronald Reagan and has been continuing for almost 30 years now- we have been seeing, as a consequence, the destruction of the middle class, the erosion of the earning power of wage earners, and enormous wealth being accumulated in this very small number of hands using the corporate forum..

Anyhow, [some governments are doing something about this sort of thing. Again, it's not just the currency. It's also 'how do you protect your economy?']. India -this also in today's Financial Times- "India moves to protect staples supplies". India is now making it illegal to export certain types of rice. They did this late in 2007. From the article by Amy Ye and Javier Blas, "Late in 2007, the Indian government, spurred by the fall in rice reserves and fear of rising food prices banned exports of non-basmati rice." They note also, "domestic demand is also outstripping supply on the back of recent growth. Middle class Indians are eating more and better food. The government has launched major social programs including a national meal plan for children and a food-for-work scheme which have contributed to burgeoning domestic consumption."

So we're looking at even food crisis' around the world.

What really pushed me over the edge is that last night - there's a couple of economic newsletters that I subscribe to and one of them is called Professional Timing Service...In his newsletter from last week, which I got around to reading last night... the author of the Professional Timing Service says, "If you're getting over 2.25%, you should look at what the fund is holding. If one money market fund were to default we could see a run to liquidate them that would put the run on the banks in the 1930s to shame." ... At the same time here, US News and World Report's Luke Mullins and Kimberly Palmer...

"Housing and credit problems are threatening to touch off a troubling new trend: an increase in bank failures. As the banking industry braces for higher loan losses, the Federal Deposit Insurance Corp. (FDIC)—which guarantees accounts at more than 8,500 banks and savings associations—has recently increased its tally of "problem" institutions by more than 50 percent, to 76, from the year-earlier period. Meanwhile, the agency is working to bring 25 officials—who served during a wave of bank failures in the savings and loan crisis of the 1980s—out of retirement."

The Controller of the Currency [is] John Dugan ... [and] the FDIC's move is coming after this guy predicted "an increase in bank failures in the coming months." Ben Bernanke (chairman of the Fed) expressed similar concerns in congressional testimony last week but noted that while certain smaller banks, especially those concentrated in real estate lending could go under, the nation's banking giants face less danger....

But its not so much about 'What should the investment strategy be?' but 'Why are our politicians still pursuing- 'Why is the Bush administration?', 'Why are the Republicans?', 'Why are some Democrats?'- still pursuing insane economic and trade policies?'

Ah, sanity. Nice to see you.

Whenever we hear the talking heads discuss the economy, it's always about the band-aids. What's Bernacke going to do? How many dollars will the government hand out as an "economic stimulus"? Can Bush beg Saudi Arabia to give us more oil and drop prices?

None of these conversations address the big picture, which is that Shock Doctrine-ish, Milton Friedman inspired, corporate profit enhancing economic policies are detrimental to the whole world, including the United States because it is causing the rapid decline of the dollar. Our economy may have been boosted for a while because of the unfettered greed of "free trade" (aka: destruction of the rules that govern big business) allowing many people around the world to get crazy rich by participating, but Greedfest had to end sometime. It's basic physics. Every action has an equal and opposite reaction. Just as the amount of booze consumed in Vegas correlates directly to the pain of the headache and the amount of time needed to function normally again in the following days, the amount of wealth accumulated by The Club was going to eventually correlate directly to the pain felt by those having to sacrifice for it and the amount of time needed to function normally again as a society.

It's reaction time, baby! The hangover ain't gonna be fun.

Here's the thing though. There is a quite simple way to get some water in our system and kick-start our recovery...

While I'm finding my bank account becoming more and more worthless by the day, the heads of Exxon-Mobil, KBR, Halliburton, Raytheon, Northrup-Grumman, AT&T, Verizon, the Bush Family, the Cheney family, the Feinstein family, the Friedman family, the Limbaugh family... they're all doing just fine. In fact, during the past 30 years, they have reaped enormous net gains while normal people, like my parents, look around and wonder where their retirement money has gone.

While normal kids, like myself, after working to get A's and B's in school for almost 20 years, look around and wonder why our college degrees are getting us nothing but debt and dull, soul-sucking desk jobs.

While sick people, like a friend of mine, wonders why being born with an illness means she will never get out from under the weight of her enormous, crushing medical bills.

While we look around and wonder if this is right, they smoke cigars and high-five each other. Life is pretty damn good when the government works for you.

There's a certain group of people that have benefited enormously from the insane economic policies that have been steadily leading to lower qualities of life for the rest of us. The reason that the politicians currently holding office in Washington won't stop these policies is because many of them are the very people who have benefited. They are also the ones who should pay. My regular readers know them as The Club.

But, lucky for us, The Club has quite a bit of water stored up for our hangover. It's called profit. The money on top of the money they actually need to run their companies and their personal lives. They've collected quite a bit of it. Since they don't need it, wouldn't the logical thing to do, as a society, tell them to pay off the debt? After all, their "mistake" in economics is what is sinking the dollar, destroying our economy, and forcing us to wage war after war.

You break it, you bought it... right?

In a sensible world, Exxon-Mobil would turn over every dime they have made in profits in the last 5 years to pay for the Iraq war.

2003 profits = $21.51 billion
2004 profits = $25.3 billion
2005 profits = $36.13 billion
2006 profits = $39.5 billion
2007 profits = $40.6 billion

Give that money back to the country that has lost 3,974 kids in Iraq and 485 in Afghanistan fighting for those profits and $163 trillion will be paid off.

Poof. $163 trillion . Done.

Then, in a just world, we would demand BP, Chevron/Texaco, and all the other smaller oil companies do the same. We also cancel their subsidies (aka: handouts from taxpayer money).

Poof. More debt gone.

In a creative world, then we would take all the workers in the oil industry (clerks, engineers, janitors... all of them) in the United States and offer them similar jobs for the government, which will use those returned profits to build and maintain green infrastructure and a state of the art public transportation system.

Poof. Crippled oil industry, less cars needed, and drastically less carbon emissions. Two birds. One stone.

In a fair world, then KBR, Halliburton, Boeing, Raytheon, and all the other military-industrial-complex war-profiteers that lobbied for and ripped us off during these wars will have to give up the billions (trillions?) that they made in profit during the last 5 years.

Poof. We might actually get to build some new bridges. And some levees.

In a smart world, then we take some of those returned profits and retrofit the factories for GM, Boeing, Raytheon and our other big weapons production factories into factories for electric cars, windmills, under-water tide-mills, and get the energy companies working on creating a strong, secure grid.

Poof. A way for those workers to keep their jobs and to give the companies a needed purpose.

In a sane world, then, if we still needed it, we would demand the return of the profits of the Bush family, the Cheney family, the Rumsfeld family, the Hastert family, the Feinstein family, the Friedman family (both of them), the O'Reilly family, the Limbaugh family - and all the other Forbes' listed Club members that have gotten rich on the backs of others because they promoted and mis-lead people into supporting "free trade" policies and war. Give them enough to live modestly off of, call the whole thing a wash (if we don't want to throw them all in prison), and move on.

Poof. The democracy of the United States of America has a chance.

And if some of these big companies go under, forcing local communities and businesses to find creative solutions to their absences ... well ... cool. As Thom Hartmann said in his review of Bad Samaritans, this is the "Monopoly" game on steroids. I'm OK with more houses on the board than hotels.

But as long as we let these rich politicians and their helpers tell us that their disastrous economic policies and never-ending series of wars are for our own good and we don't scream, "Bullshit!" loud and clear, they will keep that money in their pockets. It's time they start to fear the mobs of people who will hang out, and play music, and generally enjoy themselves, all day everyday, on their front lawns (as some people have done to Nancy Pelosi). It's time they start to fear getting harassed (non-violently, of course) every time they go to a restaurant (like when Sean Hannity got shamed out of a NH restaurant). It's time they start to feel like social pariahs. It's time they start to get loudly, publicly, repeatedly booed.

Violence is not needed. Shame is a powerful motivator too.

What are we waiting for? Bread lines and soup kitchens? Come on, Americans! Stand up and start humiliating! Its time for the carpet baggers to feel like the scum that they are. Only when that behavior is accompanied by shame and social isolation will any of them be inclined to knock it off.

Plus, it would make for some hilarious YouTube.