The Anomaly of George H.W. Bush

The recently deceased former president George H.W. Bush will not go down in history as one of America's greatest presidents, but he will probably be remembered as a good president, and certainly the least controversial president of the post-war era.

If you go through a list of all the presidents after Roosevelt, every single one has a serious black mark against his name, deserved or undeserved. All except GHW Bush.

It's not as though GHW Bush was perfect. He wasn't. He could've done a whole lot better than he did, and he did some bad stuff too.

Here's a list of the postwar presidents, and the controversies associated with them. And remember that these controversies are not necessarily deserved.

Truman - The use of Atomic Bombs against Japan.

Eisenhower - CIA coups in various parts of the world that propped up authoritarian regimes.

Kennedy - Bay of Pigs, Cuban Missile Crisis, Vietnam War

Johnson - Vietnam War

Nixon - Vietnam War, Watergate

Ford - Pardoned Nixon

Carter - Malaise, Iran hostage crisis

Reagan - Reaganomics, Iran-Contra

George H.W. Bush - Gulf War

Clinton - Lewinski Scandal

George W. Bush - 9/11, Invasion of Iraq, Hurricane Katrina, Global Financial Crisis

Obama - Global Financial Crisis, Birth certificate conspiracy

Trump - Collusion with Russia

GHW Bush was president in a transitional period of history. Communism and the Iron Curtain collapsed under his watch, an event that America did not expect and did not adequately exploit. It was also a transitional time for US politics too, with the growing demise of Rockefeller Republicans, of which Bush was one. Bush helped set up NAFTA, a trade agreement that upset a number of economic nationalists and which created a spoiler candidate for him in 1992 in the form of Ross Perot. Had Perot not run as an independent, Bush probably would've got enough votes to beat Clinton. Economically, Bush was against the Supply-Side "Voodoo Economics" that became policy under Reagan, forcing him to raise taxes to address the out of control budget deficit that had been bequeathed to him by Reagan. The decision to raise taxes rather than cut spending was an indicator of his centrist position, but he had made the mistake of initially promising "no new taxes", a policy reversal which further alienated the growing minarchist base of the Republican party.

The greatest event during his presidency was the Gulf War. With the Cold War barely over, Saddam Hussein's decision to invade Kuwait created a potential economic and humanitarian crisis. With the United Nations as a global institution still respected by Washington, Bush and other world leaders skillfully navigated diplomatic channels in an attempt to end the crisis while simultaneously preparing for war. With Saddam unmoved, the Western powers engaged in the largest military conflict since the Vietnam War. The overwhelming victory not only solidified America's place as sole military superpower, but also justified the idea of an all-volunteer military, a process which had begun in Western militaries soon after the Vietnam War finished.

In hindsight, would it have been better if the US had gone on to invade Iraq? The Iraqi military was in chaos and Saddam's grip on power loosened. Yet the post-2003 years showed just how difficult such a process would be. Nevertheless, a 1993 occupation of Iraq with the backing of the United Nations and the keen involvement of all western powers could have arguably produced a better outcome than the 2003 occupation, not least because by 2003 a combination of arrogance and incompetence had begun to typify high-level government leaders under GW Bush, a process which came to a head in 2005 with Hurricane Katrina, and which was also seen by the increasing civil war in Iraq. At least in 1993, such a combination of arrogance and incompetence was not yet noticeable (perhaps due to GHW Bush's many years in public service, including being head of the CIA).

George HW Bush's pardoning of those involved in the Iran-Contra scandal is obviously an issue. The scandal, hatched under Reagan, should have been exposed and the top people involved punished. Bush probably knew about the plan - being the Vice President under Reagan and a former head of the CIA. It's a scandal that didn't reverberate as much as it should have, and modern day American conservatism has been too quick to forget and ignore the near-treason involved in it, with feel-good nostalgia and victory over communism (a modern myth) being their memories of Reagan.

So of course GHW Bush was not a perfect president. No president is. And yet when we look through the turmoil of postwar history we see in GHW Bush as someone who managed to avoid controversies. And just as we wonder what would've happened had Gore or Hilary Clinton had become president had not circumstances intervened, so too can we wonder what would've happened had Perot not spoiled the 1992 election. Would there have been a 1994 Republican revolution with Bush in power? Who would've contested the 1996 election? Who would've been in power on 9/11? GW Bush's run for the presidency could've been delayed had his father served a second term.

So in the grand scheme of things, GHW did a few things that were good, a few things that were bad, and escaped the levels of controversy of virtually every other US leader in the postwar era. This is a great achievement.

Bernanke's money printing idea is interesting - but I have a better one

I'm no fan of Federal Reserve chairman Ben Bernanke. Bernanke's response to the 2008 credit crisis was to first state that it wasn't happening and then, when it happened, to say that it wouldn't be too bad. Fail. Moreover he was one of the members of the Federal Reserve Board under previous chairman Allan Greenspan who approved of policy keeping interest rates too low between 2002 and 2005, thus creating the conditions for the property bubble. Epic Fail.

But credit where credit's due - the recent announcement of $600 billion in bond repurchases is a step towards a more effective form of monetary policy, though I do question whether it is needed.

Bernanke has the dubious honour of being labelled "Helicopter Ben" because of some comments he made many years ago about how radical monetary policy could have solved the Great Depression. Given the damaging, persistent deflation during that period, Bernanke surmised that increasing the money supply by seigniorage (money printing) and then handing said money out willy nilly to people and businesses would have wiped out deflation and stimulated the economy to begin growing.

Of course those who ran the world economy in the 1930s did not have the information that we do now, namely that inflation and deflation can be controlled through manipulation of the money supply by central banks. The problem with conventional monetary policy is that it focuses solely upon interest rates to achieve its goal - in the case of the United States, adjusting the Federal Funds Rate is the way interest rates are raised or lowered. Developed countries have similar tools while developing countries tend to increase or decrease the reserve ratio as a way to influence monetary conditions.

Adjusting interest rates affects the money supply: Increasing interest rates will remove money from the money supply while decreasing interest rates will add money to the money supply. If a central bank wants to reduce inflation, it removes money from the money supply by raising interest rates; if a central bank wants to increase inflation (to prevent deflation), it adds money to the money supply by lowering interest rates.

Unfortunately, conventional monetary policy is constrained by the natural limits of interest rates. While there are no upper limits to interest rates, the lowest rate is obviously zero. You cannot have negative official interest rates because depositors will simply withdraw their money from banks - hiding cash under the bed is a better investment than keeping it deposited at the bank. When interest rates reach zero there is nothing conventional monetary policy can do to stimulate domestic demand - Japan is a classic example of this, with interest rates near zero for the last 15-20 years.

The Federal Funds rate is currently 0.20%. It has been below 1% since 2008-10-15, which means that the US has, for the past two years, reached the limit of conventional monetary policy. Enter Ben Bernanke and quantitative easing, and you have a radically new monetary policy tool.

The thinking is rather simple:

• To create more inflation, the money supply needs to be expanded.
• Since conventional monetary policy has reached its limit, no more money can be added to the money supply through the lowering of interest rates.
• Therefore money needs to be added to the money supply through different means.
• Seigniorage (money creation by fiat) is then used to buy back government bonds, thus increasing the money supply.

Seigniorage has been used injudiciously in the past, most notably by Weimer Germany and Mugabe's Zimbabwe, and has created hyperinflation. Yet this is the same process Bernanke is undertaking now. The difference is that the amount being created is limited, which means that the inflationary effect will be similarly limited.

But there are naturally limits to even this level of monetary policy - it is limited by the amount of government bond holders (US treasuries). While the amount of money currently tied up US government debt is huge (over $9 trillion in public debt), in theory this amount may be brought down to zero. This is an important limit for nations like Australia and Norway, whose gross government debt levels are comparatively low (and are actually net negative). Such forms of quantitative easing (as this policy is now known as) do have natural limits that need to be taken into consideration.

So what's my idea then?

Back in March 2009 I wrote an article titled Thoughts on fractional lending and quantitative easing which outlined some ideas I had at the time about unconventional monetary policy. Here it is:

The Central Bank creates money by lending it to Commercial Banks.

This would take the form of a deposit. The central bank creates money by fiat, and then deposits this money in as many banks and financial institutions (institutions that are part of the fractional banking structure) as it can find. This won't be a bond buyback, but a simple deposit. It is not important as to whether the commercial banks pay interest on such a deposit since paying back interest is not important - expanding the money supply is.

Of course, with more money deposited, commercial banks would then have more money to lend out, thus alleviating any credit crisis. There is no money entering the money supply via any bond buybacks or stimulus plans. It's simply money appearing by fiat and being deposited into banks.

But what happens once the economy begins to recover, credit begins to flow again and inflation begins to rise? Well obviously the central bank could then withdraw all or part of its deposit with commercial banks. This would reduce the amount of money commercial banks could lend out and act as a contraction of the money supply.

And then I got thinking again - what if this form of quantitative easing replaced current monetary policy completely? So rather than money being removed or injected into the money supply through bond issues or buybacks - why not simply have the central bank deposit money into commercial banks or withdraw money from its commercial bank accounts? It would still be an open market operation, but one which doesn't require a government bond market to exist or even some form of centrally set level of interest - rates would be completely market controlled and dependent upon how much money the central bank deposits into, or withdraws from, commercial banks.

So, to summarise:

To stimulate growth in the money supply (to battle deflation and thus stimulate economic growth), the central bank creates money by fiat and deposits it into commercial banks.

To restrict growth in the money supply (to battle inflation and thus restrict economic growth), the central bank withdraws money from its commercial bank accounts.

In both cases, the money supply is affected by the ability of the commerical bank to lend up to 100% of its deposits - the more deposits, the more money is lent; the less deposits, the less money is lent.

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Naturally, Paul Krugman and others will point out that increasing the money supply during a solvency crisis does little (the "pushing a string" theory) and I would agree that some level of Keynesian stimulus might be necessary, but one which sources its money from central bank money creation rather than by borrowing from the market.

In this scenario, instead of Bernanke's $600 billion being used to buy back government bonds, it is used (for example) to build wind turbines all over the country. It is monetary policy (money creation) AND fiscal policy (increase in production) acting together, and it is aimed at bettering the environment. Of course the $600 billion could be used to build tanks and machine guns for the army, or it can be used to buy everyone in the US multiple cans of Coca Cola, or it can be used to build mansions for the rich, or it can be used to build houses for the poor - the possibilities are endless, as is the potential for both intelligent or stupid spending.

What makes standard Keynesian fiscal policy work is twofold: firstly, money is injected into the economy, and, secondly, goods and services are produced, leading to a multiplier effect. Modified forms of Keynesian stimulus - such as Bush's tax cuts in the early 2000s - have only a single effect, namely money is injected into the economy. Monetary policy, even of the unconventional (quantitative easing) or radical (my March 2009 proposal) variety, has a similar effect: money is increased, but its demand (money velocity) is not. What the market does with the money after it has been gained depends upon how the market is acting, which is why monetary and/or fiscal stimuli do lead to some level of economic growth, but not as much as that enjoyed by a true Keynesian injection.

So the question comes down to this: what will the markets do with the $600 billion that Bernanke injects into the economy through "QE2" (as many have called it)? That, of course, is the issue. Will the markets use that money to invest back into the US economy or will they do something else? The markets have already reacted to the announcement by dumping some of their US dollar holdings, so it may be that QE2 just leads to a dollar devaluation, with the fiat money instead being directed towards Japan, Europe and other major economies. Here in Australia the dollar has breached parity and made buying CDs and books from Amazon.com that much cheaper. Thanks for stimulating the Australian economy, Ben.

But then all this goes back to whether the money supply should be increased. While US inflation is low (currently 1.14%, year on year) deflation is hardly a problem just yet. Deflation hit the US economy very hard in late 2008 when the credit crisis hit, but since then prices have stabilised somewhat. Paul Krugman and others would argue that the US should actually target 4% inflation as a goal rather than as a limit, in which case Bernanke's policy is heading in the right direction. Interest rates have certainly bottomed out, but where is the deflation that can't be influenced by conventional monetary policy?

And this therefore calls to question the reason for quantitative easing. Is Bernanke aiming to stimulate the US economy or is he simply trying to maintain price stability? If it were the latter, then Bernanke is crazy since the US doesn't have a problem with price stability at the moment (unless you adhere to absolute price stability like I do, of course, but that's another topic!), which means that QE2, as an inflationary policy, is being implemented when prices are not in danger of deflating. This can only mean that Bernanke is aiming to stimulate the US economy, and this is problematic.

Who in government should be responsible for direct actions to stimulate the economy? In most nations this responsibility is undertaken by politicians - in other words, elected officials. The Federal Reserve Bank is not run by elected officials but by public servants. Most central banks the world over see price stability as their major, if not sole, concern. Stimulating economic growth should not be the role of a central bank, though central banks should be open to being co-opted by governments to produce outcomes aimed at stimulating growth (an example being my proposal of Bernanke's $600 billion being used to build wind farms above). But if any policies are pursued to stimulate economic growth, they must originate from, and be ultimately controlled by, congress or parliament or diet or duma.

The problem with having a dual role - as the Federal Reserve obviously has - is that it is more open to corruptive influences. "Stimulating the economy" may mean dumping $600 billion into the accounts of troubled financial giants whose incompetency is what drove them to the verge of bankruptcy; it's not a coincidence that these financial giants just happen to own a considerable number of US treasuries that they can sell to the Federal Reserve Bank for the $600 billion being offered. If the Fed was only concerned with price stability they could simply ignore these troubled corporations and only respond to price signals from the Consumer Price Index.

Nevertheless QE2 does open the doors to monetary experimentation, which should be welcomed by those who have been concerned with the limits of interest-rate-based monetary policy.

Update 00:15:00 UTC

If $600 billion were used to build wind farms, the result would be huge. The Cape Wind project will produce 454MW for $2.5 billion. Using simple maths, $600 billion could buy 253.34 GW of nameplate electricity generation. Since the US has around 1075 GW of nameplate electricity generation, you're looking here at 25% of the US electricity market. Obviously these are hard and fast facts and there are certainly limitations to this form of extrapolation, but the sheer amount of money involved here needs to be subject to opportunity cost: would $600 billion of fiat money be better spent constructing wind turbines or injected into the US bond market?

Posted this at Reddit

Here: Someone was complaining (rightly) about Krugman's latest column.

There's something to be said for the axiom that any problems caused by cheap money in an economy cannot be solved by cheap money in an economy.

I have no problems with Keynesian stimuli - I just think it should be sustainable.

Here in Australia, our government completely paid off public debt, so when the time came to spend up big to kick start the economy, it was sustainable.

In the US, however, big spending stimulus occurred when public debt was already at absurdly high levels. In effect the government had been "stimulating" the economy for most of Reagan and most of Bush 1 and Bush 2. At some point the "chickens have to come home to roost" and the debt must be paid off by running fiscal surpluses (which occurred under Clinton's second term but was nowhere near enough). The longer you leave paying debt off, the harder it will be to do and the more negative effect it will have upon America.

BTW This is not like Hoover and the great depression. Keynes rightly argued that governments should run fiscal surpluses during a depression. Hoover tried to limit government spending because running large deficits was not really a policy that had been tried before. There was certainly no huge debt already there preventing Hoover from doing it.

Fast forward to Obama and the general consensus amongst more left-leaning economists like Krugman is that the stimulus was justified and it worked. I disagree, mainly because of the fact that the US has accrued too much debt already. Had Bush 2 continued Clinton's surpluses it is likely that the federal government's fiscal position would be such that Obama's big spending would be sustainable and would not come back to "haunt" America. But since the debt was already too big, the only option is austerity (the government paying off debt during a recession).

Iraq was invaded because of 9/11

While Bush and Cheney may have prevaricated in saying outright that Iraq should be invaded because they were involved in 9/11, the text of the Authorization for Use of Military Force Against Iraq Resolution of 2002 makes it very, very clear:

*Whereas members of al Qaida, an organization bearing responsibility for attacks on the United States, its citizens, and interests, including the attacks that occurred on September 11, 2001, are known to be in Iraq;

*Whereas Iraq continues to aid and harbor other international terrorist organizations, including organizations that threaten the lives and safety of United States citizens;

*Whereas the attacks on the United States of September 11, 2001, underscored the gravity of the threat posed by the acquisition of weapons of mass destruction by international terrorist organizations;

*Whereas Congress has taken steps to pursue vigorously the war on terrorism through the provision of authorities and funding requested by the President to take the necessary actions against international terrorists and terrorist organizations, including those nations, organizations, or persons who planned, authorized, committed, or aided the terrorist attacks that occurred on September 11, 2001, or harbored such persons or organizations;

*(2) acting pursuant to this joint resolution is consistent with the United States and other countries continuing to take the necessary actions against international terrorists and terrorist organizations, including those nations, organizations, or persons who planned, authorized, committed or aided the terrorist attacks that occurred on September 11, 2001.

Of course, this resolution was passed by a Republican congress and signed off by George Bush. Could it be any clearer?

I'm ashamed

But I laughed at this.

Why did America invade Iraq?

I've been thinking about this lately - not just in terms of the reasons America felt at the time but in terms of the reasons many Americans now believe they felt.

1. Saddam was one of those responsible for 9/11.

Well, that one went out ages ago. Most Americans believed it even though George W. Bush didn't literally say it (although it was obvious that he believed it too).

2. Iraq had weapons of Mass Destruction and were a threat to America.

Well that one went out ages ago too. Five years later and still nothing... unless you bought into all the bull about them being shipped to Syria.

3. Saddam was a bad man and deserved to be overthrown.

That Saddam was a bad man is unquestionable - but the guy was no Hitler. He was a tinpot dictator in charge of a small country who gassed his own people. But did he deserve to be overthrown? If invading Iraq because Saddam was bad is a good enough reason then surely the case could be made for invading any number of nations around the world being run by tinpot dictators. Why Iraq?

I mean, think back to the 1980s when War-Hawk Ronald Reagan DIDN'T INVADE Libya and DIDN'T EXECUTE Colonel Gaddafi. Operation El Dorado Canyon was as bad as it ever got, and Gaddafi is still alive today, continuing to not be a threat to anyone any more.

In any case, life after "Mission Accomplished" was terrible for Iraq. Violence on a daily basis in the form of car bombs, suicide bombers and religious extremism did not exist while Saddam was in power. America replaced a cruel tinpot dictator with chaos, and the result was worse. Living under Saddam was certainly better than living under American rule. One possible reason why violence has tapered off recently may simply be that millions have either left the country or are internally displaced.

4. Our Intelligence was mistaken.

Forged, more like. I've already addressed this issue in an article I wrote 3 years ago. If the intelligence was so good, why was Colin Powell producing satellite pictures of water trucks and telling the U.N. that they were really mobile Chemical weapons labs?

...

So. Those are the stated reasons. Here are some of my own.

1. We really, really thought that WMDs were there.

This is one of those "faith based community" verses "reality based community" issues. I'm not talking here about American Evangelicals (although they fit into it) but rather the idea that our thoughts/beliefs shape reality, rather than the other way around. In this case, it didn't matter how many UN inspectors were running around Iraq in 2002 and finding nothing or how many times Hans Blix said "Iraq is co-operating... we still haven't found anything" - the fact was that Saddam was a bad man who said he had WMDs and we believe him! Nothing here about due process, nothing here about innocent until proven guilty. Instead we get Condoleeza Rice warning us that the smoking gun could be a mushroom cloud or Donald Rumsfeld reminding us that absence of evidence is not evidence of absence.

Having faith in something doesn't mean you stop thinking altogether. Was it right to be concerned about potential Iraqi WMDs? Absolutely. Was it right to invade based upon the available evidence? Not at all - especially in hindsight.

2. We really, really thought that Iraq would be happy after we got rid of Saddam.

There's something Liberation of Paris that makes pro-war Americans lose their ability to think cogently. The thinking goes that if country A is ruled by dictator B, then sending troops to remove B will result in the liberation of A and make everyone love America. Sadly this rule doesn't always work, and when it doesn't the temptation is to either a) criticise the liberators for being ungrateful or b) repeat the mantra that everything is going fine and the media hates America and is reporting lies because they are in league with the terrorists.

The reality was that once Saddam's political and governmental regime collapsed, it was replaced not with a new order but with chaos. Rosy thinking - again the result more of "faith based" thinking that hard reality - being the cause.

3. We were still angry after 9/11 and had to attack someone.

I think this is the main reason. After Afghanistan was rightly invaded by America and its allies, the ease of the victory and the absence of Osama Bin Laden was too much. There was still too much anger at the horror of 9/11, but there was no way to direct or control that anger. Instead, Bush used the opportunity to invade Iraq for no other reason than misplaced revenge.

...


I want your comments.

Many of you who read my blog are American. I would really like your comments as to what you felt and thought at the time of the invasion of Iraq. Did you really think that Iraq was linked to 9/11? Did you really think Iraq had WMDs? If you changed your mind, what prompted it? I would like to find out.

Let it crash, let it crash, let it crash

An interesting argument:

I'm concerned about America's infatuation with throwing money at things. Money problems? Throw more money in the pit.

Lets take the auto industry: GM is basically out of business because they are losing billions of dollars every month. Why? Well, I'll tell you why: Because people are not buying their cars and trucks, they're buying other manufacturers stuff. GM has lost market share. It's very simple.

So, what does our government want to do? They want to take YOUR and MY tax money and give it to them to "rescue them." See, I am a capitalist. I believe that companies should rise and fall based on how they do in the free market. There is no need to rescue a company because the market has already decided they are done.

I have made a personal decision to buy Toyota when we purchased our last two family cars. I did this based on research, value, repair history, models available, and price. I chose NOT to give my money to GM, and I don't want the government to make that decision for me.

Lets do a comparison: The ice block delivery business was huge in the early 1900's, and there were many men and women employed in this industry. When the refrigerator was invented in 1911 - these companies started to fail. They lost "billions every month". They employed "thousands of hard working Americans". What if the government decided to rescue them? Throw money at the ice block delivery companies to keep them in business? What would have happened to the refrigerator companies? I'll tell you what: It would have significantly slowed PROGRESS. Innovation and the MARKET decided together that having ice delivered to an ice box wasn't as good as a refrigerator. Simple as that.

GM is an ice delivery company. Let them go if they can't innovate - don't SLOW PROGRESS!

Dear Government, let capitalism reign. Let good companies grow and poor companies shrink. Go ahead and let the bubble burst, it'll hurt for a while but the state of the economy in a few years will be much better than if you just prolonged the inevitable. Think of it like a forest fire, it's deviating when it's happening but in a few seasons you will see fresh, new, healthy growth.

Being the centre-leftist that I am, it would be tempting to answer such an argument by pointing out all the problems of letting businesses like these crash and burn. But, to tell you the truth, at this point I'm a raging capitalist.

I suppose it's a "live by the sword die by the sword" argument - if an individual or business is profiting from a market economy, then when the market turns against them, they can't complain if they go under.

The sort of socialism that I like being practised is when people - not businesses - who suffer from the ups and downs of the marketplace are given a safety net to cushion them from the fall. If one or more of the "Big 3" automakers in the US go bankrupt and are closed down, the result would certainly be unemployment and suffering for those directly involved. Instead of throwing money at the auto makers (who have failed to remain profitable in the market), money should be diverted to the former workers as they get their lives together and seek alternative employment - employment that the market will eventually provide.

Of course, it would be far better had a market crash been prevented in the first place. The market itself can't prevent its own crashing, so this is up to government.

What could the US government have done to prevent this economic crisis? Had interest rates been higher after 2001 a housing bubble would never have formed, and had Bush not enacted tax cuts during his first term, money would not have been thrown into this bubble either (not to mention lower levels of public debt).

The anti-Obama Christian bloggers

One of the more painful things I have had to read in the past few weeks has been the growing chorus of panic and dismay amongst Christian Bloggers who are going crazy over the prospect of a Barack Obama/Democrat victory.

I have had to remove one Christian blogger from my bookmarks because the standard of his writing now befits that of a propaganda apparatchik. Lee Grady, the editor for Charisma magazine, has also gone ballistic over Obama and has also found himself removed from my bookmarks.

Look - it's not that supporting McCain/Palin and the Republicans is the issue. The issue is when Obama/Biden and the Democrats become agents of the devil who will destroy America.

There's also the sources that these bloggers use that is concerning. When reporting events they tend to link to Drudge, Worldnet daily, neo-con commentators, Townhall and other "reliable" sources of information. This is not to say that "the MSM" are wonderfully accurate - but the fact is that "the MSM" depends upon more readers and watchers and there is a greater element of responsible veracity in "the MSM" than there is among Right-wing rumour sources.

I honestly think many of these Christian bloggers are bearing false witness by repeating the lies that they have heard without checking them properly. Moreover, they speak so badly of Obama that they come close to Jesus' warning about those who speak evil of others being just as bad as murderers.

This is not to say, of course, that it is somehow wrong for Christians to be critical of politicians. A casual perusal of this blog will show you my opinion of George W. Bush, John Howard and others. By contrast to the "Obama is evil" Christian bloggers, I have spoken kindly about John McCain and tried to examine his religious beliefs more objectively. In regards to Sarah Palin, I gave as objective a summary of her background at first, and then spent considerable time examining and then debunking many of the smears on her character that appeared soon after her VP nomination. Yet I do not think the McCain/Palin ticket is the better solution.

In short, I have not demonised McCain/Palin in the same way that Christian bloggers have demonised Barack Obama.

Moreover, I have to say that I am starting to get concerned about where this will lead. Polls suggest a much greater chance of an Obama win than a McCain win, which means that a situation might arise in which a great number of angry, terrified Christians are faced with an Obama White House and a Pelosi/Reid Congress.

What will these Christians do? Hopefully they will settle down, look back at what they believed in the lead up to his victory and then begin to exmaine their beliefs more objectively. Unfortunately, given the propensity of American Christians to be convinced that fiction is fact (eg Harry Potter and Satanism) I don't think this is going to happen. I'm worried, though, that violence may occur in response to an Obama/Reid/Pelosi victory as Christians take up the arms guaranteed by the constitution, refuse to pay taxes and begin overt resistance to the world of evil that they believe exists in the form of Obama and the Democrats.

I'm an Evangelical Christian. That means I do believe in the spirit world, including the existence of Satan. At the moment, though, I would guess that Satan is hiding more behind the actions of out of control American Christians than behind Barack Obama. If violence does ensue after the election - violence backed by and instigated by Christians - it will be the worst thing to happen to the church since the Spanish Inquisition. This time, however, at least I am expecting it.

Dear God, I do not pray for an Obama victory. Neither do I pray for a McCain victory. I pray that whomever you have sovereignly chosen to occupy the White House will be a man whose actions and policies make America and the world a better and more peaceful place. I pray that your church maintain its faith in you through this process and not be tempted by the excesses of any political belief they may hold, whether that be "politically conservative" or "progressive" in nature. Give your church a desire for personal holiness, an enthusiasm for your Word, the Bible, and a focus upon Christ on the cross, the empty tomb and the prospect of his eventual return. Amen.

Bush finally gets it right

From America's Finest News Source:

In a nationally televised address to the American people Wednesday night, President Bush called upon every man, woman, and child to spiral uncontrollably downward into complete and utter panic.

Speaking from the Oval Office, Bush assured citizens that in these times of great uncertainty, the best and only course of action is to come under the throes of a sudden, overwhelming fear marked by hysterical or irrational behavior.

"My fellow Americans, the time for running aimlessly through streets while shrieking and waving our arms above our heads is now," Bush said. "I understand that many of you are worried about your economic future and our situation overseas, and you have every right to be. Yet there is only one thing we as a nation can do in times like these: give up all hope and devolve into a lawless, post-apocalyptic, every-man-for-himself society."

"For those of you who have remained resolute in your belief that things will turn around eventually, I urge you to close your eyes, take shallow rapid breaths, and begin freaking out immediately," Bush added. "At this point, anyone who isn't scared to death needs to wake the fuck up—because we're screwed here."

Tax increase plan must follow bailout

Details, details, details.

I'm personally not interested in the finer points of the Paulson bailout plan. Whether it is an undemocratic grab for power or some sort of corporate welfare is really not the issue for me. I reluctantly agree that some sort of bailout is necessary, but I am no real supporter of Paulson and Bernanke, nor the financial system that got itself into this mess in the first place. Without some sort of relief, the US credit system would seize up and, although this is somewhat deserved, the collatoral damage for the rest of the economy would be too high.

So, the bailout is necessary. But I'm not going to stop there. With such a massive amount of debt added to the public accounts, the Federal government will be paying back this debt for years to come. Short term relief? Yes. But long term pain as the government struggles to repay the debt.

WIthout some way of paying for the debt, the only option seems to be tax increases. The bailout plan is just too large, and US government spending is just too (relatively) small for any form of expenditure cutting on behalf of the government - unless, of course, Americans are happy to suddenly give up Social Security or shut down the military.

And the ones who should shoulder these tax increases? Why not the ones who got the US into this mess in the first place? There seems no choice but to increase income taxes on the highest marginal tax rate. The corporate tax rate should also be increased.

Naturally, such proposals would leave some spluttering into their gin and tonics. "Raise taxes?" they say, "What a preposterous thing to suggest! Don't you know that lower tax rates encourage economic growth? If we raise taxes during a recession, we'll be killing the goose that lays the golden egg!".

To which I reply - look at what low corporate taxes and low income taxes have brought about. The popping of the housing bubble and the credit crisis were not caused by horrible, yucky increases in taxation. In fact, the bubble and the credit crisis came about AFTER tax rates were LOWERED.

Others would not just be spluttering into the gin and tonics but also be locking and loading their assault rifles. "The Federal guvmint is just TOO big!", they say "Taxation and government are violence! If the guvmint raises taxes, I'll be shacking up in Idaho!"

To which I reply good riddance. Go to Idaho to protect yourself from the guvmint while the rest of the country suffers under the hand of corporate irresponsibility.

Yes, this is another fine mess you've got us into corporate America and the political shills you have bought and paid for who pass legislation to make you richer.

But back to Paulson and Bernanke. Yeah, congress, give them the money. But raise taxes too. In fact, insist that no bailout plan be passed without Paulson, Bernanke and Bush adding tax increases to the bill.

It's time to follow The Washington Consensus

I've just finished scanning my way through The Washington Consensus. Until now I didn't realise how much neoliberal economic theory I had imbibed over the years, which is supremely ironic considering my support for big government ideas like universal health care, free public education and industry regulation - essential components of Democratic Socialism.

The Washington Consensus was, according to Wikipedia:

initially coined in 1989 by John Williamson to describe a set of ten specific economic policy prescriptions that he considered to constitute a "standard" reform package promoted for crisis-wracked developing countries by Washington, D.C-based institutions such as the International Monetary Fund (IMF), World Bank and the U.S. Treasury Department.

And here were the ten policy prescriptions (again, copied and pasted from Wikipedia):

• Fiscal policy discipline.
• Redirection of public spending from subsidies ("especially indiscriminate subsidies") toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment;
• Tax reform – broadening the tax base and adopting moderate marginal tax rates;
• Interest rates that are market determined and positive (but moderate) in real terms;
• Competitive exchange rates;
• Trade liberalization – liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform tariffs;
• Liberalization of inward foreign direct investment;
• Privatization of state enterprises;
• Deregulation – abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudent oversight of financial institutions;
• Legal security for property rights.

Now compare that list to the list of policy decisions I have been proposing as a way of mitigating America's current economic plight:

• Cut military spending
• Raise taxes on the rich
• Run a fiscal surplus to pay back public debt
• Use monetary policy to keep inflation low
• Create and enforce stricter financial regulation so this doesn't happen again
• Fire Ben Bernanke
  

Who would've thought about prescribing for America what America prescribed for developing economies under financial stress?

If you check out the points of The Washington Consensus, there are many points which apply.

Fiscal Policy Discipline.
This pretty much fits in with my "cut military spending, raise taxes on the rich and run a surplus to pay back debt". The important thing here is that fiscal policy - how a government spends its money - should be disciplined. In other words, there should never be any large amounts of public debt. As I have pointed out multiple times before, America's public debt is too high as it is and will go even higher in the aftermath of this current financial crisis. Had the US government under Bush been fiscally disciplined, the level of public debt would have been a lot smaller, and the cost of bailouts and fiscal stimuli been more sustainable. Moreover, neither the US government nor the market can spend its way out of the current financial crisis. Spending more will make it worse. Austerity is needed.

Redirection of public spending from subsidies toward broad-based provision of key pro-growth, pro-poor services.

I haven't really touched on this because the US doesn't have much in the way of subsidies except for the mind-blowingly stupid agricultural subsidies and protection in place. What has occurred, however, is a "subsidy" in the form of tax cuts for the rich. In other words, the cutting of taxes for the rich since 2001 might as well be the same as government subsidies for certain industries. These tax cuts were certainly not enjoyed by the poor, whose plight is shown up by median wage data which shows wages in 2008 to be below that of 2001. Moreover, according to The Washington Consensus, "pro-growth, pro-poor services" are things like increased spending on health care and basic education - two areas which have suffered in America's recent history.

Tax reform – broadening the tax base and adopting moderate marginal tax rates.

Tax should be simple and should be broad. Taxing one industry more than another leads to an economic imbalance. Again, this part of the Consensus can be applied to the Bush tax cuts because such tax cuts ended up narrowing the tax base. Moreover, by decreasing taxes for the rich, more money than normal would have been pumped into investments. The current financial crisis has seen this money disappear.

Interest rates that are market determined and positive (but moderate) in real terms.

As I have argued elsewhere on this blog, the Federal Reserve ran negative real interest rates from 2003-2005, and from mid-2007 onwards. This has occurred under the chairmanships of both Alan Greenspan and Ben Bernanke.

John Williamson, one of the main proponents of The Washington Consensus, writes that positive real interest rates "discourage capital flight" and "increase savings". Capital flight is now a real danger to the US economy, a process which would lead to a severe devaluation of the US dollar.

Privatization of state enterprises.

Fannie and Freddie - need I say more?

Deregulation.

This is obviously and interesting one. Some people think that this would involve cutting away government rules and letting the market go haywire - in other words, what has been occurring recently. Yet such deregulation in The Washington Consensus is qualified - only regulation which will result in better economic performance should be set up. This naturally includes instances where unregulated markets end up destroying themselves and the wealth of others. In the case of America's financial market, better rules and regulations should be set up to prevent this crisis from occurring again.

...

In summary, I submit again that the only policy direction the US should go in now is to follow the points of The Washington Consensus that they themselves helped to create. Moreover, I submit again that there is no other choice. The crisis has hit, the seeds that were sown are now being reaped. Watching the Treasury and the Fed act like incompetent third-world officials making panic-stricken, knee-jerk decisions is more than enough evidence for anyone who looks at this issue judiciously.

McCain, Money and Mondale

Anyone who reads this blog regularly knows my distaste for the US Republican Party. This distaste has been present ever since George W. Bush won the 2000 election. This does not mean that I am a partisan Democratic supporter, but it does mean that, at present, I honestly believe that the best choice America has in November is Obama and Biden.

The fact is that I will support whatever party has the better policies or the better record or a combination of both. Back in 1996 I voted for John Howard and the Liberal Party (which is, ironically, Australia's conservative party) because the Labor Government under Paul Keating was philosophically bankrupt and, despite 13 years of economic reform, had not been fiscally responsible. My support for John Howard evaporated after 2000 when he began to implement racist policies and use the fear generated by 9/11 for political gain. Joining in the 2003 invasion of Iraq was another problem for me.

So my support for the Democratic Party and Obama has nothing really to do with partisanship. I am sure that I would support the Republican Party at other times if their history since 1981 was different. Having said that, I will state now that a McCain/Palin victory in November may possibly end in disaster.

I personally have no beef with John McCain, and the only thing that really worries me about Sarah Palin is whether or not she is capable of being America's president in case McCain goes to meet his maker. The policies of John McCain, though, are problematic - specifically his tax cutting program.

I have seen a comparison of Obama's and McCain's tax plan and McCain gives the biggest tax cuts by far. Obama gives bigger tax cuts to lower income earners than McCain, while increasing the taxes of those on higher incomes, with the end result being a small net tax cut.

For many conservatives, the idea of a tax cut is wonderful news. The problem is that McCain, along with Obama, has yet to explain how such a tax cut will impact government spending. I am of the belief that any tax cut should be met by a corresponding cut in government spending. I am also of the belief that if anyone wants to increase government spending, then taxes must rise as well.

The problem is that, for the last 25 years, the Republican Party has been dominated more or less by Supply-side economics, a form of "voodoo economics" which believes that tax cuts fund themselves by stimulating economic growth and generating more tax revenue. While there is some truth to be found in the more intellectual corners of this economic system, it has resulted in a simplistic and effective myth -  that the government should just keep cutting taxes.

After 25 or more years, popular supply-side economics has resulted in nothing but large federal government deficits. Ronald Reagan's big tax cuts in the 1980s were followed by increased tax revenue but also a corresponding increase in public debt. It was not until George H.W. Bush raised taxes after his "read my lips" promise that Supply side economics began to lose its influence. But by that stage, the damage had been done and the US government was deeply in debt.

Such was the loss of standing of Supply side economics that Republicans during the 1990s returned to a more traditional economic stance. Whatever I may have disliked about the Republican Congress under Newt Gingrich and their government shutdowns and impeachments, the fact was that they worked with the Clinton administration to balance the budget - a process that eventually led to surpluses near the end of Clinton's presidency.

Unfortunately, the Republican congress under Bush enthusiastically returned to the populist appeal of tax cutting. The result has been astounding, with public debt increasing dramatically. The recent Fannie Mae and Freddie Mac bailout will see a substantial increase to this level of debt. The current recession in the United States will also result in lower tax revenues.

So, fiscal irresponsibility + Fannie and Freddie Bailout + recession equals a federal government with a massive debt burden that will most likely exceed any comparative level of net debt in peacetime US history.

Of course, for regular readers, this warning of mine is nothing new. So why am I repeating the fiscal alarm all over again? It is because I believe that a McCain/Palin administration will continue the fiscal irresponsibility started under Bush. Moreover, the inaction of the Democratic-party dominated congress (elected in 2006) has allowed the situation to deteriorate. If the White House continues to be Republican, there is little chance that a Democratic Congress will have the testicular fortitude to stand up to him and pass economically sensible bills.

The only real chance for fiscal responsibility to return to Washington is for a Democratically controlled Congress and White House. Republicans have proven themselves too attached to Supply side economics for the past 25 years (with the notable exception of the Gingrich years) while the Democrats have not.

This is not to say that the Democrats (Obama and congress) won't make a hash of the economy between 2009 and 2012 - I'm just saying that they are less likely to ruin the economy than one in which Republicans control the White House during that period.

Hard decisions must be made in 2009 about the federal budget. Loaded down with increasing amounts of debt, congress and the president must pass spending bills that will ensure that revenue exceeds spending - or at least a bill that will return the budget to surplus over a number of years. In order to do this, taxes must be raised or spending must be cut or some combination of both.

But herein lies the problem. If taxes are to be raised, won't that hurt the economy? And if spending is to be cut, which government departments should suffer the most cuts? Given the massive expansion in military spending since 2003 and the inefficiencies that run through it, and also given the fact that other federal government departments are so small in comparison (completely closing down NASA and the Department of Education won't be enough to stop a big deficit), then whoever sits in the White House next year will have a very unenviable task. What should next year's president do?

Given the nature of the Republican Party, it is unlikely that McCain and Palin will raise taxes or cut military spending. At most, they will probably cut back on other expenses (like NASA or Education), a process that will simply not be enough to return the federal government to a fiscally sound position - to say nothing for the damage that such cuts would make to important government services. The result of a McCain/Palin White House is therefore likely to be one in which the federal debt gets larger and larger - a process that will lead America further into economic decline.

On the other hand, an Obama/Biden White house along with a Democratic Congress is far more likely to make painful but necessary decisions. I'm not saying that this is a given, but I am saying that it is more likely.

Which brings to mind the prophetic words of 1984 Democratic presidential candidate Walter Mondale. When discussing the Reagan tax cuts and the deficits that had resulted from them, Mondale said these fateful words:

By the end of my first term, I will reduce the Reagan budget deficit by two-thirds. Let's tell the truth. It must be done, it must be done. Mr. Reagan will raise taxes, and so will I. He won't tell you. I just did.

Reagan won the election in a landslide, mainly due to the perception that Mondale was a "tax and spend" Democrat. Yet, in hindsight, Mondale's words have come back to haunt the Republican Party and the memory of Reagan. Supply side economics was still in its ascendency during the Reagan years and people had not yet begun to suffer its negative effects. Now that Supply side economics has been proven beyond reasonable doubt to be unworkable and ultimately damaging to an economy, the time has come to pay the price for political expediency and financial stupidity.

It was over ten years ago that The Simpsons episode "Trash of the Titans" was aired. In that episode, Homer becomes Springfield's sanitation commissioner, defeating the incumbent Ray Patterson (voiced by Steve Martin), and promises a lot of crazy things for the people of Springfield. Homer's policies soon end up bankrupting his department and completely ruining the city. When Ray Patterson is unanimously voted back in as sanitation commissioner, he gives this wonderfully short speech:

Oh gosh. You know, I'm not much on speeches, but, it's so gratifying to leave you wallowing in the mess you've made. You're screwed, thank you, bye.

I can't help but think of comparing Walter Mondale to Ray Patterson here. Twenty-four years after his abysmal failure in the 1984 presidential election, Mondale could probably be justified in repeating Ray Patterson's short speech.

Lessons from Italy and Australia

If the United States is to avoid a long term fiscal disaster, it needs to learn from other nations. America cannot continue to ignore the lessons learned from other countries in the blinkered belief that manifest destiny or divine intervention somehow makes it different from the rest of the world and not subject to the same set of rules.

Now usually when I say this sort of thing I am often pushing forward something wonderful that is present in non-American countries that America could use. Universal health care, increased public education and stricter gun laws come to mind here.

This time, however, I am going to use a negative example as well as a positive one. Rather than just showing America what it could become if it does the right thing, I am also going to show what America could become if it does the wrong thing.

In previous posts (here and, more recently, here) I have pointed out that the fiscal irresponsibility of the US Federal government is, by itself, a clear threat to medium-long term economic growth. When combined with other factors (namely Peak Oil, the subprime mortgage crisis and an unsustainable current account deficit), its negative effect is amplified.

When a government does not have enough tax revenue to fund its expenditures, it turns to the market to borrow the required amount. Government bonds are an integral part of credit markets worldwide and function as a baseline measurement for corporate bonds and mortgages and other forms of debt-based activity.

Notwithstanding the part that government debt plays within the world's financial markets, if a government runs deficits over the long term then the debt to GDP ratio increases. In the case of the United States, this number is probably somewhere between 40 and 60% of GDP.

The country that I am setting up as a warning for America to heed is Italy. The following image is one I scanned from a pdf file about the 2007 Italian Budget (download here. pdf, 627.2kb):

This is obviously not a detailed report on the budget, but it gives more than enough information for our purposes.

There are two very important figures in this budget summary. The first is the section marked burden of national debt, which totals €74,564 million. The second is the bottom section marked redemption of national debt, which totals €189,099 million.

That first figure - burden of national debt - represents the interest repayments that the Italian government has to make on its borrowings. Like all bonds, government bonds first have to pay back interest and then, once it matures, the principal. This figure in the budget represents the amount of interest they have to pay on bonds owing. The second figure - redemption of national debt - is the amount of money the government pays back on maturing bonds.

Together, the amount of money the Italian government spends on debt servicing (interest plus paying back principal) is €263,663 million.

Now let's put that number in perspective.

€263,663 million represents a whopping 41.2% of the Italian government's spending in 2007. According to the same document, Italy's GDP in 2007 was estimated to be €1.475 trillion, which means that debt servicing also represents 17.9% GDP.

Such figures almost defy comprehension. Italy's net public debt is around 107% of GDP. Moreover, Italy's public debt has been at this size or even higher for more than a decade (it was 113.6% in 1999).

By way of comparison, America's fiscal irresponsibility is mild. Debt servicing so far represents 15.75% of government spending and 3.13% of GDP - figures that are dangerously high but not as extreme as Italy's.

This is not the place to discuss in detail the reasons for Italy's fiscal nightmare - the nature of Italian politics is probably a major contributing factor. The fact that Italy's political leaders have been unable to find bipartisan support to control government spending has meant impoverishment for their nation.

But just how impoverished is Italy? After all, they are a sophisticated and educated western nation with a high standard of living. That may be true, but the key to understanding how impoverished they are is to examine the opportunity costs of such massive debt servicing.

From a leftist point of view - the point of view which supports high levels of government spending to support universal health care, free and/or cheap public education and so on - the €263,663 million in debt servicing (41.2% of the budget) is money that could have been used for public spending. Education spending in 2007, for example, was €50,066 million. Health spending was €11,661 million. Public order and safety spending was €21,122 million. Every Eurodollar spent in debt servicing was money not spent on improving the nation's social services.

But the leftist view is not the only valid one. From a more economically conservative point of view, that €263,663 million was money that could have been returned to people and businesses in the form of lower taxes. And imagine what sort of tax rates they could have been - 17.9% of GDP not taken up by the taxman.

The message here is clear - governments that have run long term deficits have, over the long term, created a combination of less government services and higher taxes. Money that could have gone into government spending or lower tax rates are instead being used to pay back a national credit card bill that, in the case of Italy, defies logic.

Fiscal responsibility is therefore not a left/right issue. From whatever ideological position you come from, ensuring that public debt does not spiral out of control must be a common goal.

Italy does, of course, have a number of natural advantages. As part of Europe they are in close proximity to an immensely rich and wealthy group of nations that have enriched it through trade. The fact that Italy has adopted the Euro means that any concerns that investors have in Italy's financial position are cushioned by the economic strengths of other nations that have adopted the Euro as well. This fact is tempered, however, by the fact that many other nations in the Eurozone have problems with fiscal irresponsibility as well - though nowhere near that of Italy's (with the notable exception of Belgium).

The good news is that it is possible for politicians - even those in Italy - to work together in a bipartisan way to fix their budgets. The solution is actually simple - either increase revenue or decrease expenditure and run a fiscal surplus over many years. When it comes to politics, however, this is easier said than done, especially when increasing revenue means raising taxes and decreasing expenditure means cutting spending on health, education and public welfare.

While the Clinton years are often seen as a period of intense political partisanship, it is important to remember that the Democratic president and a Republican Congress - for all their bitter fighting - were able to agree very early on to fix the nation's public debt. The result was a series of budget surpluses late in Clinton's second term (helped in no small part by the 1990s Tech boom) and a reduction in national debt. Although Bush and the Republican Congress have ruined this since 2001, there is every reason to believe that a bipartisan solution can be found. Sadly, however, the current political discourse rarely mentions the fiscal imblances which means that, when the next US president takes office in 2009, neither Republicans nor Democrats will see balancing the budget as a priority.

There is one country that has, however, managed to eliminate net public debt - and has done so without resorting to profits from oil but from pure budgetary discipline. That nation is Australia.

Australia's fiscal example should stand as an example to other nations. In 1996 when the conservative Howard government came to power, net public debt was around 20% of GDP. While this was quite small in comparison to other nations - both now and at the time - steps were taken very early to cut spending. So although net debt was comparatively small, it was never allowed to increase. Importantly, cuts to spending were made when unemployment was moderately high - at around 8%. This meant that, when the economy recovered from the effects of the spending cuts, economic growth in the years that followed produced large and growing budget surpluses and steady improvements in unemployment. Moreover, the government could then afford to make incremental tax cuts on an annual basis - a process that was quite politically rewarding. Since 2005, unemployment has dropped below 5%, big budget surpluses are run regularly, income tax rates are lower than ever and net public debt is now negative.

The Howard government did, of course, lose power in 2007, which shows that no poitical party should rely solely upon economic performance to drive their political fortunes. Nevertheless, Australia should serve as an example of what can be achieved if politicians take a long view on important things like fiscal responsibility.

It is likely that the effects of Peak Oil and the subprime meltdown will be far reaching. Countries that are fiscally weak like Italy will either be forced into making painful fiscal readjustments or else run their nations into bankruptcy-in-all-but-name by increasing their deficits. On the other hand, countries like Australia will be in a more flexible position and will have room to cut taxes or increase public spending.

What will become of America, though? While I would like to think that America could avoid Italy's fate I am not at all certain that bipartisan steps can be made to rectify the situation before net public debt hits record levels - say between 75-85% of GDP.

One thing is certain, however, and that is that America's fiscal position will determine its influence in the world over the next 20 years. If America should go down Italy's route, you can almost guarantee that America, as a society and as an economy, will be a pathetic reflection of what it was for most of the 20th century.

In the face of a semi-permanent energy crisis along with the spectre of global warming, what the world of the 21st century needs is a strong, free America. Being fiscally responsible is an important step in that direction.

AAAAAAAAA

A blog post with every single category marked (I'm doing this for scribefire)

The 10 Most Awesomely Bad Moments of the Bush Presidency

Alternet has them. Here's a sample - go read the whole thing.


10. Bush gets re-elected.
The low point in the whole affair came when administration allies and surrogates took to the airwaves to falsely accuse Democratic candidate John Kerry of lying about his service in Vietnam, even claiming in one instance that he intentionally shot himself to get out of the war.

9. Alberto Gonzales' Congressional Testimony.
Essentially, all of the attorneys in question had exemplary performance records but were targeted because they did not prosecute several so-called "voter fraud" cases to then-presidential adviser Karl Rove's satisfaction.

8. North Korea Conducts a Nuclear Test.
While there is a great deal of dispute over whether the North Korean test was actually a successful test, it seemed clear that Bush's strategic doctrine of ignoring our enemies until they meet every one of his demands has failed somewhat spectacularly.

7. Colin Powell's Bogus WMD Presentation at the U.N.
During his speech, Powell told scary tales of mobile biological weapons labs, chemical weapons stockpiles and aluminum tubes that could be used in a nuclear weapons program. All of these claims turned out not only to be wrong, but based on sourcing that even Powell acknowledged was "deliberately misleading" in some cases.

6. The Terri Schiavo Affair.
After numerous state courts had sided with then-husband and guardian Michael Schiavo and ruled that Terri's condition was irreversible and that her feeding tube could be removed to end her life, the Christian Right launched into an epic freak-out the likes of which America has not seen since 17th Century Salem.

5. Bush and Condi's Excellent Gaza Adventure.
After Hamas predictably defeated Fatah in the elections, Bush decided he didn't like democracy in the Middle East so much after all, and he had Condi Rice tell Fatah leader Mahmoud Abbas that "America expected him to dissolve the Haniyeh government as soon as possible and hold fresh elections." Apparently, Condi believed that having an American-backed leader dissolve a democratically elected government would warm the Palestinians' hearts to American aims.

4. "Brownie, You're Doing a Heckuva Job".
Aug. 29: Katrina makes landfall, then-FEMA chief Michael "Brownie" Brown warns Bush that the levees could overflow, Bush gives John McCain a cake. Brown, a Bush hack who had previously worked as "the chief rules enforcer of the Arabian Horse Association," also preemptively asks Cindy Taylor, FEMA's deputy director of public affairs, if he "can quit now." He also declares himself "a fashion god."

3. Abu Ghraib.
Administration apologists used two distinctly different strategies to push back against the inevitable bad press that ensued: One was to condemn the guilty parties but refer to them merely as "a few bad apples" who weren't reflective of American policy; the other was to dismiss the entire scandal as "an out-of-control fraternity prank."

2. 9/11.
The Republicans' "The Democrats Want to Help al Qaeda Kill You" gambit worked for two consecutive elections before finally running out of gas in 2006. But even so, the ability of one political party to garner votes simply by yelling about treason incessantly is incredibly depressing.

1. "Mission Accomplished".
And in the time since Bush performed this grotesque PR stunt, roughly 4,000 troops have been killed in action along with tens of thousands of Iraqis, with nary a WMD in sight to justify the carnage. Heck of a job, all around.

They're all great except the last one - "tens of thousands" of Iraqis killed is wrong. The total death toll has probably exceeded one million.

Impeachment - a matter of principle

From the department of against the grain:

On Monday evening, Rep. Dennis Kucinich (D-OH) took to the floor of the House of Representatives to read out 35 articles of impeachment against President George W. Bush in an almost five-hour marathon.

Kucinich's action made an immediate splash on the Internet. For example, at progressive website Democratic Underground, the historic performance quickly garnered an astonishing 56 separate threads on the most-recommended list.

By noon on Tuesday, RAW STORY's article on the subject was the top political story of the day at digg.com and the 10th most popular for the last year. A separate article at afterdowningstreet.org was also high in the ratings. Both sites, as well as Kucinich's own webpage, were experiencing slowdowns due to the volume of traffic.

However, the mainstream media were far more reticent in their coverage of Kucinich's resolution -- much as they were following the release last week of the Senate Intelligence Committee's report on the administration's misuse of prewar intelligence. For example, the Washington Post and USA Today had short items in their blog sections, while other major outlets merely ran wire service coverage from AP or Reuters.

If you hadn't heard this news the chances are you're not alone - large media organisations simply failed to report it. But, as you can see, the story spread very quickly over the internet.

Sadly - and I mean that - Kucinich's action will probably fail to mobilise a majority of House Democrats to pass it, thus denying the chance of the impeachment succeeding.

The most annoying arguments against Impeachment that I have heard do not come from Bush-loving Republicans, but Bush-hating Democrats. Markos Moulitsas, the creator of the popular Democratic and Progressive community blog Daily Kos has opposed impeachment for some years now. Moreover, John Aravosis, the leading blogger at the progressive Americablog.com, has said that Kucinich's actions are merely "publicity stunts" and "kooky".

The reason that both Moulitsas and Aravosis give is that such an action is a) unlikely to succeed, b) is not supported by popular opinion and c) that it will hurt the public image of the Democratic party. As Jules says in Pulp Fiction, "allow me to retort".

The fact that the motion is unlikely to succeed is certainly an element that should govern political decisions. Nevertheless, the reasons why Kucinich has proposed impeachment is due to what he and many people see as overwhelming evidence that George W. Bush lied to the American people about the threat posed by Saddam Hussein and Iraq and gained popular support to invade and conquer a sovereign nation... all without formal congressional approval (ie a declaration of war). Moreover there is also overwhelming evidence that Bush and his closest advisers approved the use of torture upon terrorist suspects. These are grave charges and ones that go beyond mere politics. This is not about a president lying under oath to cover up adultery, but about a president whose actions have resulted in the deaths of thousands of Americans and probably more than one million Iraqis, as well as causing untold suffering to millions more Iraqis as they flee violence as refugees. The fact that such a motion is likely to fail politically is not the issue - it should be presented and acted upon on merit alone.

The fact that the motion does not receive public support is irrelevant. Impeachment is a legal procedure and does not need public support for it to be deemed right. In theory, any form of legal procedure should be addressed on merit rather than upon its popularity. The fact that impeachment requires the actions of democratically elected representatives is irrelevant as well, especially when you consider that county judges in the US are often called upon to make objective decisions, yet are often elected to their positions.

Lastly, the fact that this action may hurt the Democratic party is probably the most irrelevant reason of all. Ordinary people are sick and tired of politicians who do not stand upon principle. It will be ten years ago in December when President Clinton was impeached for lying under oath about his relationship with a White House intern. History has proven that such an action was not only unpopular, but also unnecessary - "High Crimes" do not obviously include covering up sexual impropriety. In the light of history, therefore, Clinton's impeachment will be shown for what it was - a desperate attempt to gain political power by the Republican Party. The potential impeachment of George W. Bush - even if it fails - will at least be based upon far more important factors, namely the invasion of a sovereign nation and the resulting deaths of Americans and Iraqis. If the Democratic party should be subjected to political ridicule, at least let it be due to doing the right thing. In years to come, the Democrats will suffer a political backlash by NOT impeaching now. Sometimes it is worth doing the right thing, no matter the cost.

Impeachment, therefore, is a matter of principle. I don't care one way or another whether the Democrats think they'll be hurt politically by impeaching Bush. That is not the point. The point is that it is the right thing to do.

Hurricane Katrina - who was to blame?

From the department of there-is-something -deeply-wrong-with-America:

Instead of supplying relief to the city, Rove had devised a scheme whereby he could blame the failure of government to take action on someone besides Bush. "They looked around," Landrieu says, "and they found a Democratic governor and an African American Democratic mayor who had never held office before in his life before he was mayor of New Orleans -- someone they knew they could manipulate. Ray Nagin had never held public office and here he was the mayor of New Orleans and it was going underwater."

In short, Rove was going to blame Blanco for the failure of the response in Louisiana, and to do that he was going to use Nagin. He had already set the plan in motion on Tuesday with Nagin, who, even though he was a Democrat, was so close to the Republican Party that some members of the African American community in New Orleans called him "Ray Reagan." In 2000, Nagin had actually contributed $2,000 to Bush's campaign when he ran for president.

...

Rove sold the story, as he had in the past, through the media. On Wednesday, while Blanco was trying to get help from the White House, her staff began receiving calls from reporters questioning her handling of the disaster, almost all of them citing as their sources unnamed senior White House officials.

"One story," Blanco aide Mann recalls, "would say the governor was so incompetent she had not even gotten around to declaring a state of emergency when she had actually done so three days before the storm. It was obvious to us who was behind this attack based on inaccurate information that was being shoveled to Washington reporters who were identifying their sources as senior Bush administration officials." Blanco adds, "People at Newsweek told me the White House called them to say I had delayed signing the disaster declaration. The assumption was that their source was the political director -- Karl Rove." Not only was the attack on Blanco in print, it was also on television. "All of a sudden," Blanco says, "a whole lot of talking heads showed up on television repeating the misinformation over and over, making it the truth."

Iraq: Conservative Shame

From the department of Wartime Propaganda:

To the public, these men are members of a familiar fraternity, presented tens of thousands of times on television and radio as “military analysts” whose long service has equipped them to give authoritative and unfettered judgments about the most pressing issues of the post-Sept. 11 world.

Hidden behind that appearance of objectivity, though, is a Pentagon information apparatus that has used those analysts in a campaign to generate favorable news coverage of the administration’s wartime performance, an examination by The New York Times has found.

The effort, which began with the buildup to the Iraq war and continues to this day, has sought to exploit ideological and military allegiances, and also a powerful financial dynamic: Most of the analysts have ties to military contractors vested in the very war policies they are asked to assess on air.

I can't explain how vindicated I feel about this report from the New York Times, yet I fear that this will again be ignored by those who should know better.

Essentially it goes like this - the Pentagon, under orders from the Bush administration, got together retired military experts, briefed them regularly, and then watched as they turned up as talking heads on every major news network defending what was going on in Iraq. Moreover, many of these "experts" are also board members of, and/or lobbyists for, defense contracting companies who profit from war. This is shameful, and it confirms a number of different things:

1) The Bush administration lied about the war.
2) The Bush administration let Americans and Iraqis die in order to serve their political ends.
3) The upper echelons of high ranking American servicemen are riddled with political corruption.
4) The military-industrial complex - in which industries that profit from war encourage its escalation - is real.
4) The media is not biased towards the left wing, but the right wing.
5) Conservatives swallowed this bull because they're not objective, can't think properly and suffer from cognitive dissonance.
6) Anti-war lefties who opposed the war from the very beginning and who argued that the Bush administration was orchestrating a sophisticated propaganda campaign to promote the war and lie to the American people were not crazy moonbats but actually well informed thinkers who merely reacted to the facts as they saw presented to them.
7) Pro-war conservatives will read this New York Times report and dismiss it as lies propagated by the left-wing media.

To my mind, people who still support the Iraq War are not only morally vacant, but intellectually vapid as well. They do not deserve respect or the time of day. They have descended into the valley of flat-earthers, and UFOlogists, but are more of a danger to society than these goons ever will be. In a sense, Iraq war supporters give flat-earthers and UFO goons a bad name.

America - where evil deeds protect good people?

The only thing necessary for the triumph [of evil] is for good men to do nothing.

Unless, of course, the good man resorts to evil deeds in response to evil:

In dozens of top-secret talks and meetings in the White House, the most senior Bush administration officials discussed and approved specific details of how high-value al Qaeda suspects would be interrogated by the Central Intelligence Agency, sources tell ABC News.

The so-called Principals who participated in the meetings also approved the use of "combined" interrogation techniques -- using different techniques during interrogations, instead of using one method at a time -- on terrorist suspects who proved difficult to break, sources said.

Highly placed sources said a handful of top advisers signed off on how the CIA would interrogate top al Qaeda suspects -- whether they would be slapped, pushed, deprived of sleep or subjected to simulated drowning, called waterboarding.

The high-level discussions about these "enhanced interrogation techniques" were so detailed, these sources said, some of the interrogation sessions were almost choreographed -- down to the number of times CIA agents could use a specific tactic.

The advisers were members of the National Security Council's Principals Committee, a select group of senior officials who met frequently to advise President Bush on issues of national security policy.

At the time, the Principals Committee included Vice President Cheney, former National Security Advisor Condoleezza Rice, Defense Secretary Donald Rumsfeld and Secretary of State Colin Powell, as well as CIA Director George Tenet and Attorney General John Ashcroft.

In the past 12 months my stance against the Bush administration has not so much softened as it has not been discussed. Most of my anti-Bush, anti-Iraq War statements at this blog occurred in 2005 and 2006. Since the middle of 2007, I have focused mainly upon economic issues, probably because it was a developing area (and still is) and is more interesting.

But this recent revelation - quoted above - reminds me of the anger I still hold against the Bush administration for destroying America's reputation around the world. The fact is that the Bush administration - and Bush himself - approved the use of torture of terrorist suspects. Abu Ghraib was not some anomoly, it was the natural result of things. Stories we have heard of torture at other places, like Bagram, Guantanamo Bay and the roving CIA torture cells that walk into other countries and violate their sovereign laws by kidnapping people and taking them to places where they can be tortured for information - they are true. These stories have moved from rumours to substantiated rumours and have now gone onto documentable fact signed and sealed by those at the top of the US Administration.

Add to this the flimsy basis upon which the Iraq war was founded upon - with the deaths of over 4000 US Servicemen and probably over one million Iraqis since 2003 - and the situation seems very clear.

I'm exceptionally annoyed that impeachment of Bush and Cheney was never seriously considered. It speaks volumes of America's seriously skewed priorities that one President's lies to protect adultery was grounds for the first and only impeachment trial of the 20th century while the invasion and conquest of another nation (which was unconstitutional in the first place) that results in the deaths of over one million people, the economic and social ruin of tens of millions of others did not so much as get looked at in Congress.

Bush, Cheney and his gang may not escape impeachment, but it is in the interests of American and the entire world for these people to be tried as war criminals, with immunity granted to those in the lower echelons so that they may testify about what they saw and heard - these lower echelons being those who actually created the procedures and participated in them.

But, then again, I wouldn't hold any hopes high for such a process to happen. If only Bush, post-president, were kidnapped and extraordinarily rendered to Europe to face the International Criminal Court - that would be justice.

In order for evil to triumph, it is not just necessary for good people to do nothing... it is also for evil people to get into positions of power and abuse them in the name of good.

And to think that Bush - and Ashcroft - publicly declare faith in Christ. Abomination.

PS - Thanks to Tom Hinkle for setting me off on this.

George Bush's historical standing - a flowchart