On July 28, White House Budget Director Jim Nussle announced that the expected deficit for Fiscal Year 2009 (it begins October 1, 2008) would be a whopping $482 billion. A record for red ink, the figure shatters the previous deficit of $413 billion set in 2004.
After President George W. Bush asked guests at a Republican fundraiser to turn off their cameras — which at least one person failed to do — he proceeded to blame Wall Street for the current financial and housing troubles: “Wall Street got drunk.... It got drunk and now it’s got a hangover. The question is how long will it [take to] sober up. And then we have the housing issue.”
In June 2000 global-warming prophesier Ross Gelbspan lamented, “Over the last seven years, the fossil-fuel lobby has mounted an extremely effective campaign of disinformation to persuade the public and policymakers that the issue of atmospheric warming is still stuck in the limbo of scientific uncertainty. That campaign for the longest time targeted the science. It then misrepresented the economics. And most recently it attacked the diplomatic foundations of the climate convention. And it has been extraordinarily successful in creating a relentless drumbeat of doubt in the public mind.”
As of Tuesday, July 15, crowds outside branches of the failed California bank IndyMac were getting ugly. On the second business day after federal agents seized control of bank assets and promised orderly restitution of FDIC-insured funds to IndyMac customers, large numbers of shocked depositors still had not been reimbursed. Those who had more than the FDIC-guaranteed $100,000 in IndyMac accounts were still awaiting word as to what portion of their life savings they could expect to see again.
Will we be seeing $10-$12/gallon gasoline and a lot more body bags before the end of the year? That depends on the answers to a couple other important questions, such as: will the Bush-Cheney war hawks launch a war against Iran before the November elections, as they have been aching to do for the past several years? Or will they encourage/sanction an attack on Iran by Israel that will end up drawing us into the fray? Either way, we certainly seem to be headed needlessly on that disastrous collision course.
On Thursday, July 10, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke testified before the U.S. House of Representatives’ Committee on Financial Services. The backdrop for the committee meeting, of course, is the ongoing turmoil in U.S. and global financial markets, highlighted by the Federal Reserve’s unprecedented intervention to prevent the failure of giant investment bank Bear Stearns, and more recent worries that the two government-sponsored mortgage lending companies Fannie Mae and Freddie Mac are in danger of implosion.
It was a full year ago when the New York Times carried a small 220-word article claiming that rumors about construction of a massive new highway system from Mexico through the United States into Canada were the product of “urban legend.” But the July 31, 2007 article included a tiny 1x1.5-inch photo showing a map of the planned route that would, in effect, bisect Texas and gravely impact other states. Only a conceptual drawing of the road’s potential location, the photo had been released by NASCO, the North American SuperCorridor Coalition. If no substance to the rumors, why the NASCO map?
If even a stopped clock can tell the right time twice a day, Iranian President Mahmoud Ahmadinejad, the leader of the world’s fourth-largest oil exporter, just might have given the world a rational partial explanation for high oil prices recently. Speaking at a June 17 OPEC meeting held in the Iranian city of Isfahan, Ahmadinejad charged: “Certain hands, for political and economic ends, are controlling the price in an artificial manner.”
Many Americans today are understandably concerned about the state of the economy. The current recession is likely to be one of the worst in recent memory, and comes at a particularly difficult time for many Americans, just as many of the Baby Boom generation are planning to retire. American workers have come to expect stocks, mutual funds, bonds, and other investment opportunities to increase year after year, yet the stock market’s marginal performance over the past few years and the recent instability in the banking sector have made many wonder whether their retirement and savings accounts are safe.
The Consumer Price Index (CPI) measures the average price of consumer goods and services purchased by households. The government uses the CPI to “calculate inflation.” Changes over the past 40 years to the CPI “to better reflect the actual costs” of goods and services in this country have not only provided a poorer reflection of the true costs but have actually harmed our economy.