The economic risk of Bush policies

Interesting take on the economic risk of the low dollar, trade imbalance, etc.  Definitely worth a read.

A few years ago the euro was worth 85 cents.  Today it is worth $1.48.  This is an enormous decline in the exchange value of the US dollar.  Foreigners who finance the US budget and trade deficits have experienced a huge drop in the value of their dollar holdings.  The interest rate on US Treasury bonds does not come close to compensating foreigners for the decline in the value of the dollar against other traded currencies.  Investment returns from real estate and equities do not offset the losses from the decline in the dollar’s value. 

China holds over one trillion dollars, and Japan almost one trillion, in dollar-denominated assets.  Other countries have lesser but still substantial amounts. As the US dollar is the reserve currency, the entire world’s investment portfolio is over-weighted in dollars.

No country wants to hold a depreciating asset, and no country wants to acquire more depreciating assets.  In order to reassure itself, Wall Street claims that foreign countries are locked into accumulating dollars in order to protect the value of their existing dollar holdings.  But this is utter nonsense.  The US dollar has lost 60% of its value during the current administration.  Obviously, countries are not locked into accumulating dollars.

Note, the author is a bit overwrought in places, but the central point about the risk to the American and world economies bears discussion.


Past meets future

A Sully commentator has an interesting perspective on the current GOP race:

It would be a fascinating race if that’s what it turns out to be. A reader writes:

It is urban vs. rural, lapsed Catholic vs. fundamentalist Protestant, North East v. Deep South. On the issues, it breaks down along those lines. Look at how they stand on trade, taxes, guns, gays, abortion, healthcare. They both symbolize parts of the GOP that hate each other. After all do you really think guys who work on Wall Street want to hang out with the Values Voters, or vice versa? If it comes down to these two against each other and it gets nasty that could really divide the party for a long time.

But Huckabee represents the future of Rove’s sectarian, big government party, and Giuliani the conservative past. The only thing keeping Rudy alive, I think, is his authoritarian appeal to the Jacksonian “bomb-em-round-em-up-and-torture-them” wing of the GOP. So the two natural developments of the Bush years – massive spending and untrammeled executive war-power – find their two representatives. And if you’re a traditional conservative, you feel like slashing your wrists.

It’s an interesting thought, and one that can be extended.  Ron Paul and Tom Tancredo are the crazy old aunts in the attic, banging around and embarrassing the “nice” people downstairs.  Fred Thompson is the “one up” uncle whose real life exploits are far less exciting than the accomplishments he claims in from the distant past.

A stinking pile of creationism

Whatever’s John Scalzi visits the Creationism Museum.

Imagine, if you will, a load of horseshit. And we’re not talking just your average load of horseshit; no, we’re talking colossal load of horsehit. An epic load of horseshit. The kind of load of horseshit that has accreted over decades and has developed its own sort of ecosystem, from the flyblown chunks at the perimeter, down into the heated and decomposing center, generating explosive levels of methane as bacteria feast merrily on vintage, liquified crap. This is a Herculean load of horseshit, friends, the likes of which has not been seen since the days of Augeas.

And you look at it and you say, “Wow, what a load of horseshit.”

Read the whole thing.

Booing veterans

Follow this link to get to a transcript of the GOP debate.  Some interesting points were made, Giuliani spanking McCain over the line item veto, for example.

From the volume of blogosphere posts, an apparent highlight was retired General Keith Kerr whose question was:

My name is Keith Kerr, from Santa Rosa, California. I’m retired brigadier general with 43 years of service, and I’m a graduate of the Special Forces Officer Course, the Command and General Staff Course, and the Army War College. And I’m an openly gay man.

I want to know why you think that American men and women in uniform are not professional enough to serve with gays and lesbians.

It’s a fair question, and he got the expected non response responses. The Carpetbagger Report picks up on something I missed:

CNN’s Anderson Cooper asked Gen. Kerr, who was in the audience for the event, whether he was satisfied with the responses. Not surprisingly, he wasn’t.

“With all due respect, I did not get an answer from the candidates,” Kerr said, adding, “We’re talking about doctors, nurses, pilots, and the surgeon who sews somebody up when they’re taken from the battlefield.”

At which point, the Republican audience began booing the 43-year military veteran. It was an interesting contrast — at Democratic debates, veterans get standing ovations. At Republican debates, veterans get booed if they’re gay.

It’s an interesting point.  Basic questions of fairness and equality shouldn’t be controversial or even remotely partisan in 2008.  And the GOP “base” booing a veteran with 43 years of service is just pathetic.  And the usual suspects are spewing spittle over the ex post facto revelation that Kerr is leaning democratic.

Carpetbagger continues:

I’m not sure what the fuss is about. Kerr asked a legitimate question about a political issue. Candidates answered it. Kerr defended his position, and the conservative audience booed him. Who cares if he supports a Democratic presidential candidate? It wasn’t a partisan question.

It seems to me the problem here is that Republican presidential candidates want to discriminate against able-bodied, patriotic Americans, who are prepared to put their lives on the line during a war for their country. Conservatives can’t explain why this policy makes any sense at all, so they’re attacking an honorable, 43-year military veteran for daring to raise the subject in the first place.

Booing Kerr isn’t the answer; allowing equality in our ranks is.

Hagel piles on

Senator Chuck Hagel piled on to the Bush White House yesterday at a Council for Foreign Relations event in New York.

Hagel, who considered running for the GOP presidential nomination as an antiwar candidate, told the foreign policy experts that he would give the Bush administration “the lowest grade of any I’ve known.”

“I have to say this is one of the most arrogant, incompetent administrations I’ve ever seen or ever read about,” Hagel said, according to our colleague Robert Kaiser, who attended the speech. In case his audience didn’t get the point, Hagel also said: “They have failed the country.”

He’s absolutely right, of course, but few among the GOP recognize that.

Hat tip: Think Progress

The spin cycle

Kagro at Kos has a good take on the Giuliani Affair:

Rudy will no doubt deny any knowledge of, oh, you know, how the city’s finances are run (even as he takes credit for “fixing” them), and then maybe even fall back on the, “Hey, it’s a fact of life and everyone has a private life” explanation.

But while it’s true that everyone has a private life, it’s also true that public leaders know its price. If you want to claim it’s no big deal that Giuliani was having an adulterous affair, that’s one thing. But why not just be an adult and have it, already? Why the long drives out of the city, when you know full well it’s going to cost $3,000 a pop (no pun intended — and we hope he got a better rate than that by buying in bulk)? What was the taxpayer cost of having his gal pal come by the mansion?

But he didn’t want to do that, because that would be unseemly. Family ValuesTM and all, you know. So he snuck out to the Hamptons instead (where everyone America’s just gotta “have a beer with” summers, dontcha know) and passed the costs on to the city. Because he couldn’t be a man and be honest about what he was doing, and never gave a moment’s thought to whether or not it was fair to make you and me pay for his cowardly selfishness. And why would he? He’s a Republican. Their entire philosophy of government is to privatize the benefits of public expenditures.

So here we are in round one of the spin game. If there could have been no worse timing for breaking the story than the night of a debate, then there’s perhaps no better timing for the spin cycle than during a television writer’s strike, when Giuliani will be spared the acid test of political scandal: late night comedy monologues.

It’s an interesting situation for the righteous folks who haven’t been happy to begin with.  It’s one thing to have skeletons in the closet, but to be paying their room and board at taxpayer expense – and milking unrelated agencies to do so?  That’s going to be an issue.  And it should be.