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The War President, Redux

Posted by Rick · April 23rd, 2004 · No Comments

This may surprise you, but this post is not actually about the war in Iraq. Sure, it might end up containing a sentence or two touching on the war in Iraq, but it isn’t about that.

This post is about the war on the economy — both that of the United States, and that of the World.

Jeremy Rifkin, writing in a guest opinion for the Cottage Grove Sentinel, notes,

OPEC sells oil for dollars, [and] the oil-producing countries are losing precious revenue as the value of the dollar continues to erode. And because oil-producing countries then turn around and purchase much of their goods and services from the EU and must pay in euros, their purchasing power continues to deteriorate.

This story came to my attention when one of my co-workers, who is preparing for a trip to his home in the UK, was talking to me about the difficulty the sliding dollar has created for his planned trip. He noted that he has to pay more for Euros (European Currency) than ever before. He told me that this trend has accelerated and become a problem over the last four years.

“Really?,” I asked. I had no clue about this. I follow social issues relating to rights much more closely than I follow economics.

“Yes,” he said. “One of the problems is that interest rates are so low in the United States right now and the deficit is so high that the dollar is weak.” He then went on to tell me that interest rates will have to be raised to reinforce the sliding value of the dollar before it causes further harm worldwide.

I said, “Well, that’s not a problem! I’ve been watching the news lately, and Greenspan has given every indication that interest rates are going to go up! So we’ll be okay!”

And then he told me that the problem with that is that raising the interest rates can be harmful to the economic recovery internally; that is, for the United States itself. He added, “If they raise the interest rates, that will complete the pat–ern” — I really like that British glot–al stop! — “that lead up to The Great Depression.

“Whoa!,” I said.

“Yeah, ‘whoa.'”

Rifkin’s article continues,

[T]he dollar’s value is declining because of America’s growing debt. The IMF is so concerned about US debt — the result of rising budget deficits and trade imbalance — that it issued a report warning that if steps weren’t taken to reverse the trend, it could threaten the financial stability of the world economy.

The reason?

An ever-weaker dollar makes foreign investors less interested in financing the mushrooming U.S. debt. The U.S. could raise interest rates, making it more attractive for foreign investors, but that would mean higher interest rates for U.S. companies and consumers, which could dampen the already weak recovery and send us back into a recession here and around the world.

This brings to mind another post I wrote earlier this month. In “Oily? Or Slimy?,” I noted that a Republican Cyborg, riding the public opinion that brought his more human (if significantly less intelligent) political idol, George Bush, to power was following a similar path: Convince the voters that all our budgetary problems will go away if we just apply for a larger credit card.

My complaint then was that digging a deeper hole is seldom the solution to one’s budget/debt issues, controlling spending is. But somehow the Republican government — which has already given large numbers of tax dollars to Halliburton, Bechtel and Worldcom; which has provided a huge tax break for…well, it wasn’t me or you!; which has already noted that the war they fought to obtain the second-largest oil reserves in the world isn’t going to lower gas prices in America; and which has recently indicated that that war in Iraq is going to cost more than was planned for — has convinced the American public that Republicans are for smaller government and less government spending, while Democrats are big spenders.

As Governor Donald L. Kohn said at the Federal Reserve Bank of Atlanta’s Public Policy Dinner on January 7, 2004, we cannot continue to borrow money from the rest of the world to sustain our deficit. (Incidentally, this blog article of mine doesn’t even discuss, as Kohn’s remarks do, the fact that by lending us money, these foreign governments become owners of our capital — in other words, they own us just as certainly as your credit card companies own you.)

We, the American people, need to ask ourselves: If Republicans are for less spending and Democrats want to “spend, spend, spend,” why did we have huge budget deficits under the administrations of Reagan and Bush I? How did we have budget surpluses after two terms under the Clinton Administration? How did it go so quickly back to massive deficits under the self-described War President, Bush II? Why did we have a stronger dollar under the Clinton Administration than we do under the Bush II regime? And why are we waging expensive wars that do nothing to benefit the United States and only anger the very people we claimed to be “liberating”? Why are we continuing to talk about giving tax cuts to the rich in the mistaken belief that this inspires them to invest it in America when, in fact, those rich folk are busy running companies like Wal-Mart that are exporting American jobs to other countries? Speaking just about jobs, why is it that the current presidency is “shaping up to be…the first presidency since Hoover’s in which the American economy lost jobs”?

President George “Dubya” Bush has done gone and “dubbed ya” all idiots. He has rightly declared himself to be “The War President.”

It’s high time we realized that the war he and his corporate supporters are fighting is against us.

Special thanks to Harry Lerwill for sending me the Rifkin link and for the discussion of it.

Categories: The U.S. & The World


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