Friday, January 30, 2004
The Biggest Bush Fraud Of All
The Bush Administration claims everything is lovely. They base this on two quarters’ GDP growth, which itself is based heavily on rising stock prices.
Prices are up from a year ago, as much as 20%. But the fact that is being hidden is that the value of the dollar is also down, by an equal (sometimes greater) amount.
This does not just mean a European vacation is out of the question. It also means that foreign investments in our economy are, despite the rising stock market, actually falling in value. Japanese, Chinese, Arab, and European investors are all losing money on their dollar investments.
Now consider that both our trade and budget deficits are largely funded by foreigners. China’s purchases of dollars are the biggest “seller financing” deal of all time. (We get stuff, they get dollars, they don’t change those dollars into Chinese currency.) It won’t continue if the value of those dollars keeps declining.
Consider too that for generations the dollar has been a “reserve currency.” Oil is priced in dollars, and our government pays for the national debt in dollars. This is an advantage enjoyed by no one else. Every economic collapse in the developing world, whether in Asia, Africa or Argentina, is tied to their currency’s fall in value against the dollar. Their loans were in dollars, their currency fell against the dollar, so no matter how much they paid back, they owed more and more. No other nation, other than ours, can actually finance its debts by just printing more money.
That is about to change. Oil exporters won’t take dollars forever if those dollars turn to water in their hands. Bankers won’t lend us dollars forever if those dollars turn to water, either.
At some point, maybe this year, Russia or Saudi Arabia could start demanding oil payments in something more stable, say, Euros. As the Euro becomes a “reserve currency” our economic power wanes permanently. So does our economic independence. Our best companies, even our land, can all be had on the cheap.
A falling dollar fuels higher interest rates, higher prices, and falling real incomes, even if things seem OK in the short term. George W. Bush did this deliberately. A falling dollar makes our exports cheaper, and imports more expensive. It’s short-term gain for long-term pain. He hopes to keep the scam going through, say, November.
There is only one Democrat who has called Bush and Fed Chairman Alan Greenspan on this fraud. That Democrat is Howard Dean.
The question for America today is this? Are you going to let Bush get away with this fraud as well?
No? So what are you doing TODAY to make sure he doesn’t?
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Obama 2008 - I want my country back
Nation-Building was founded by Aziz Poonawalla in August 2002 under the name Dean Nation. Dean Nation was the very first weblog devoted to a presidential candidate, Howard Dean, and became the vanguard of the Dean netroot phenomenon, raising over $40,000 for the Dean campaign, pioneering the use of Meetup, and enjoying the attention of the campaign itself, with Joe Trippi a regular reader (and sometime commentor). Howard Dean himself even left a comment once. Dean Nation was a group weblog effort and counts among its alumni many of the progressive blogsphere's leading talent including Jerome Armstrong, Matthew Yglesias, and Ezra Klein. After the election in 2004, the blog refocused onto the theme of "purple politics", formally changing its name to Nation-Building in June 2006. The primary focus of the blog is on articulating purple-state policy at home and pragmatic liberal interventionism abroad.