Monday :: Nov 15, 2004

Waiting For The Next Shoe To Drop

by pessimist

OK, we've had almost two weeks to vent our spleens about the latest (s)election of George W. Bu$h. It's time to take a look at the issues that we face as a nation, and size up the chances for keeping things from getting worse. In order to do that, however, there needs to be a way to break the lock Bu$h has on the Red States. Here's one idea for doing that:

Winning Back the Heartland

The time has come to make conservative a bad word. America is a liberal country. The Republican Party has done a great job of marketing conservatism, while the Democrats have not defended liberalism. The Challenge over the next four years will be to paint many Republican policies as immoral and against the interests of rural America.

Ok. How?

What is needed is a concerted effort to communicate to people that liberal policies are in their interest. Democrats must stand up and say that universal health care, a living wage, protecting the environment, and protecting social security are liberal values and they are in the interest of rural America. It is time to look at people like Senator Tom Harkin and realize that he is a populist liberal and is able to win in Iowa.

It is time to stop trying to mold candidates for the electorate they are facing and run candidates that will move the electorate. An effort must be made to recruit candidates who will make the case that Democratic Party values are American values and the Republican party does not have rural America's best interests at heart.

The latest Zogby Poll indicates that there is an opportunity to do this very thing. (Yes - I remember what I posted earlier about polls. I hereby state that proof of these interpretations by Zogby remain to be seen.)

The Zogby America telephone poll of 987 likely voters was conducted from Friday through Saturday (November 12-13, 2004). Overall results have a margin of sampling error of +/-3.2%.
President George W. Bush Job Performance Rating Nov 12-13

Positive 48%, Negative 51%, Undecided 1%

Respondents are also still split on the direction of the country. Forty-seven percent say that the country is headed on the right track, while nearly half (44%) say the U.S. is on the wrong track.

US Direction Nov 12-13

Right 47%, Wrong 44%, Undecided 9%

The fact that 9% of those polled aren't sure we are going in the right direction indicates that Bu$h doesn't have the mandate he loves to crow about. It may prove that as events in Iraq continue to deteriorate, and as oil prices resume their upward climb as the Saudis exhaust their ability to flood the world's oil markets with crude to keep George looking good to SUV drivers, enough of these undecideds will turn negaitve on his leadership. Add in the almost-certainty of the restoration of the draft, and the mid-term elections would bode well for the Dems - assuming that the election weren't rigged again (and what are the chances of THAT considering the high stakes involved?).

Here's why I say the draft IS going to happen - NATO just isn't interested in playing Texas League ball on Bu$h'$ home field anymore:

Nato missions 'threatened by refusal to send troops to Iraq'

The American general who serves as Nato's military commander has warned that 10 member countries' refusal to send troops to Iraq for the alliance's new training mission [training???? - ed] threatens the long-term viability of the operation, making it difficult to find enough forces to serve in Baghdad.

More ominously, General James Jones, the supreme allied commander, Europe, said the block by the 10 nations, which he would not name, could undermine the alliance itself, which is already stretched by missions to Afghanistan and the Balkans. "We have roughly 10 countries that will not participate and not send their forces inside Iraq," Gen Jones said in an interview with the Financial Times.

The countries that have publicly refused to send troops to Iraq include the US's long-time opponents of the war, France, Germany and Belgium, as well as Spain, which joined them after its change of government. Luxembourg and Greece are also among those believed to be withholding forces.

Sorry to disappoint you, General Jimmy, but the EU is already discussing establishing what has to be the replacement for NATO. [PDF] Here's why that should worry you:

The US has separately complained that France and Germany have forbidden staff seconded to Nato headquarters in Mons, Belgium, and Norfolk, Virginia, to participate in the Iraq missions. Such a move could breach the alliance treaty, which requires officers assigned to Nato to be subordinate to Nato orders and not their national chains of command.

It's sounding to me like these nations no longer think of NATO as an alliance of mutual defense, but believe instead that the US is treating NATO as an auxilliary, as mercenaries in a sense. They do not agree with Bu$hCo policies or methods, and the see through the bluff and bluster of Bu$hCo, so they are no longer afraid that they will be left to the Commie wolves if they piss off Uncle Sammy. They know that the biggest immediate threat they face is from the US - and they are already acting to ward off that threat.

Combined EU military command separate from US influence isn't the only action the NATO countries can take. They can stop buying US Treasury Notes which fund the action of Bu$hCo:

Dollar's Decline Is Reverberating
If foreign investors look elsewhere, interest rates could climb and living standards could fall.

During a routine sale of U.S. Treasury bonds in early September, one of the essential pillars holding up the economy suddenly disappeared.

Foreigners have been regularly buying nearly half of all debt issued by the U.S. government. On Sept. 9, for the first time that anyone could remember, they stayed home.

The episode demonstrated how much the U.S. economy is dependent on other countries to bankroll its free-spending ways. That fragility is becoming even more precarious because of recent declines in the U.S. dollar to multiyear lows, some economists say. The greenback dropped last week to a record low against the 5-year-old euro, a 12-year low against the Canadian dollar and a nine-year low against an index of major currencies. Many analysts don't see anything that will stop the decline.

A cheaper dollar reduces the value of American securities, making them less attractive to foreign investors. That could eventually precipitate what Robbins called 'the doomsday scenario' - Japan and China not only refusing to buy U.S. bonds, but selling some of their $1.3 trillion in reserves.

That, folks, is roughly 2.5 times the existing Bu$hCo federal defecit. If you need a personal example of what this action on the part of these nations means, run up all your credit cards and then try to pay for Grandma's emergency brain surgery. The good news? Funeral flowers grow wild in some places.

The only way Uncle Sam could then find new customers for its IOUs would be by raising interest rates. And although higher rates are good for savers, they would be disastrous for a country weaned on cheap credit.

"Sometime soon, the falling dollar is going to show up in rising inflation, rising interest rates and a falling standard of living," said Harry Chernoff, an economist with Pathfinder Capital Advisors. "The housing and mortgage markets, which benefited the most from declining interest rates over the past few years, are likely to feel the most pain."

If the dollar falls too far too quickly, they say, those all-important foreign investors will abandon the U.S. in favor of stabler places.

Indeed, there are signs that such an exodus might have already started.

In August, the most recent period for which there's data, foreign private investors sold $2 billion more in U.S. stocks than they bought, the Treasury said. Meanwhile, they dumped $4 billion more in government bonds than they purchased. "A run for the exits could happen any day, that's for sure," said C. Fred Bergsten, author of Dollar Overvaluation and the World Economy and director of the Institute for International Economics, a Washington think tank.

"The insidious thing about deficits is that they go on as long as the markets allow them to go on," said Maurice Obstfeld, an economics professor at UC Berkeley and author of many works on global capital markets. "So people get lulled into the certainty they'll always be able to borrow at low rates, and that this is right and normal and an endorsement of their behavior," he said. "But it has to stop at some point."

This week, Congress will have to raise the government's $7.4-trillion debt ceiling so it can borrow more money. According to the nonpartisan Congressional Budget Office, by 2008 nearly 10% of the budget will be devoted to interest payments. President Bush has pledged to halve the deficit by 2008. Many economists say that will be difficult, if not impossible, without raising taxes, something Bush has pledged not to do.

In his postelection news conference, the president said the economy could grow its way out of trouble. "As the revenue streams increase, coupled with fiscal discipline, you'll see the deficit shrinking," he said. The stock market soared on Bush's remarks, but the currency markets rendered a different verdict.

The dollar continued to fall.

Usually indirect bidders, which include foreign governments, are heavy buyers at Treasury auctions. This time, their purchases were less than 3%. Traders speculated that Japan was finally calling it quits.

And can China be far behind?

China has pegged its currency to the dollar. A weak greenback means a weak yuan, making Chinese goods cheaper in foreign markets and fueling the nation's economic boom. Having China decouple the yuan from the dollar also could help, economists say. It's a step the Bush administration has sought from Beijing, with little progress. Allowing the yuan to float upward would raise the price of Chinese goods in this country and reduce the U.S. trade deficit with the new Asian powerhouse, estimated to be $150 billion this year.

But if the Chinese resist, the euro will rise even further. It could move up from last week's $1.30 to $2, Bergsten said. Three years ago, it was worth 84 cents. That ascent would upset the Europeans, whose exports would suffer and whose economies are already struggling. Central bankers usually speak in measured tones, but European Central Bank President Jean-Claude Trichet was moved last week to call the euro's rise "brutal" and "not welcome."

So let's sum up for a moment. Bu$hCo military policies are alienating our European allies, and Bu$hCo economic policies are alienating just about everyone.

Hey, Red Staters! Still think 'moral values' was the real issue facing this nation? It may yet prove to be leadership after all.

Now, with Colin Powell leaving, will Bu$h make things worse by naming that incompetent nincompoop Condi Rice to replace him? Misguided as he was, and as much of a liar as he proved to be, at least Colin had some respect in some foreign capitals. Can the same be said for the wannabe Mrs. Bu$h?

George Tenet doesn't think so!

A not-so-covert swipe at Condi?

Should Condoleezza Rice be worried about the memoir that ex- CIA director George Tenet is peddling?

The former spy chief "trashes" the national security adviser in his book proposal, one publishing insider tells us. "He claims she was incompetent, that she didn't do her job" when it came to protecting the country from terrorists, the source says.

Tenet, who spent two weeks meeting with publishing-house editors, is also said to lay odds that Al Qaeda will strike next with a radioactive "dirty bomb."

"He says they're looking for a symbolic, high-value target - presumably in Washington or New York," says our source. "He says the terrorists' only difficulty is getting it into the country."

So if Islamic terrorists - or any variety of terrorist, for that matter - won't show her any respect, can the same be said for foreign diplomats?

Stay tuned!

There is only one way out of this mess. The few remaining Republican moderates have to use their influence by voting against harmful Bu$hCo initiatives. Finally, there is some indication that at least one of these moderates, Olympia Snowe, recognizes this role:

Moderate voices retain sway in bolstered GOP

The real brake on an ultraconservative agenda in the Senate could be Republicans from Democratic-leaning states -- the Northeast moderates and independent thinkers whose votes will also be needed to pass contested legislation. They don't like runaway deficits, and some of them favor abortion rights. Most voted against a constitutional ban on gay marriage, and several withheld their support for energy and Medicare bills that the Republican leaders in Congress wanted.

Northeast Republicans are insisting on making their moderate and fiscally conservative voices heard, saying Bush could not have won without support from centrist Republicans. "I think the view that moderates as a group should be jettisoned from the party wouldn't bode well for the future," said Senator Olympia Snowe, Republican of Maine and cochair of the Senate Centrist Coalition.

Cultural conservatives, especially antiabortion activists, are not so inclusive. Claiming a critical role in reelecting President Bush and expanding the Republican majorities on Capitol Hill, conservatives are pressuring senators to deprive Senator Arlen Specter -- a moderate Republican who won reelection to his Pennsylvania seat despite the state going for John F. Kerry -- of the Senate Judiciary Committee chairmanship. That fight will be an early test of Republican leaders, who must weigh the demands of Christian conservatives against moderates like Snowe, who are supporting Specter's ascension.

"No one group elected the president. Moderates contributed as much as anybody. About half of the Republicans are pro-choice," Specter told CNN last week in one of several television appearances to explain himself. New Hampshire's Republican senators, John Sununu rejected the idea that cultural conservatives either gave Bush the election or deserve to control the party now. "It's a big, broad party right now. That's one of the reasons we were so successful," Sununu said. "I hope that doesn't change anytime soon."

Even if Specter is denied the leadership position, conservatives in and outside government will have to contend with a cadre of Republicans who must answer to constituents who do not favor all of the Bush agenda. Maine, New Hampshire, Rhode Island, and Pennsylvania all went for Kerry in the presidential election.

If conservatives insist that six of the seven Republican senators from those states move to the right, they could lose those members - or those states - to the Democrats, political analysts said.

We can only hope! So what issues should we be watching to note whether or not this shift in power is underway?

Senator Susan Collins is also a leading centrist who, as chairwoman of the Governmental Affairs Committee, has played a prominent role in developing legislation in response to the 9/11 Commission. New Hampshire's Republican senators, John Sununu and Judd Gregg, are both conservatives but are willing to oppose party leaders on fiscal and environmental matters. Gregg, the incoming chairman of the Budget Committee, has indicated some caution on additional tax cuts, saying extension of the current tax cuts and alterations to the Alternative Minimum Tax, a tax increasingly affecting the middle class, may suffice for the immediate future.

What of Lincoln Chafee? Wasn't he going to split from the GOP?

Senator Lincoln Chafee, Republican of Rhode Island, said he could not vote for Bush and hinted earlier this month that he might bolt the party. Last week, Chafee said he would remain a Republican.

But his membership in the Republican caucus has not made him a reliable vote for his party on legislation. The soft-spoken Chafee has been a particular source of frustration for Republican leaders because he does not bargain for political favors in exchange for votes. While other senators work the floor, trading votes, Chafee simply votes his conscience his colleagues say, then goes back to work without apology or explanation. He voted against the war in Iraq, against the administration's energy bill, and against the gay marriage ban - stands which are in line with his liberal state.

He wavered once. Bu$hCo activities will make him waver again - maybe this time far enough to change his affiliation a la Jim Jeffords. And he might not travel alone.

So hang in there kiddies! Help may still be on the way!

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pessimist :: 2:09 PM :: Comments (12) :: Digg It!