In a conversation recently, I mentioned as an aside what a great president George Bush has been and my friend was surprised. I was surprised that he was surprised.
I generally don't write columns about the manifestly obvious, but, yes, the man responsible for keeping Americans safe from another terrorist attack on American soil for nearly seven years now will go down in history as one of America's greatest presidents.
Produce one person who believed, on Sept. 12, 2001, that there would not be another attack for seven years, and I'll consider downgrading Bush from "Great" to "Really Good."
Merely taking out Saddam Hussein and his winsome sons Uday and Qusay (Hussein family slogan: "We're the Rape Room People!") constitutes a greater humanitarian accomplishment than anything Bill Clinton ever did -- and I'm including remembering Monica's name on the sixth sexual encounter.
But unlike liberals, who are so anxious to send American troops to Rwanda or Darfur, Republicans oppose deploying U.S. troops for purely humanitarian purposes. We invaded Iraq to protect America.
It is unquestionable that Bush has made this country safe by keeping Islamic lunatics pinned down fighting our troops in Iraq. In the past few years, our brave troops have killed more than 20,000 al-Qaida and other Islamic militants in Iraq alone. That's 20,000 terrorists who will never board a plane headed for JFK -- or a landmark building, for that matter.
We are, in fact, fighting them over there so we don't have to fight them at, say, the corner of 72nd and Columbus in Manhattan -- the mere mention of which never fails to enrage liberals, which is why you should say it as often as possible.
The Iraq war has been a stunning success. The Iraqi army is "standing up" (as they say), fat Muqtada al-Sadr --the Dr. Phil of Islamofascist radicalism -- has waddled off in retreat to Iran, and Sadr City and Basra are no longer war zones. Our servicemen must be baffled by the constant nay-saying coming from their own country.
The Iraqis have a democracy -- a miracle on the order of flush toilets in that godforsaken region of the world. Despite its newness, Iraq's democracy appears to be no more dysfunctional than one that would condemn a man who has kept the nation safe for seven years while deifying a man who has accomplished absolutely nothing in his entire life except to give speeches about "change."
(Guess what Bill Clinton's campaign theme was in 1992? You are wrong if you guessed: "bringing dignity back to the White House." It was "change." In January 1992, James Carville told Steve Daley of The Chicago Tribune that it had gotten to the point that the press was complaining about Clinton's "constant talk of change.")
Monthly casualties in Iraq now come in slightly lower than a weekend with Anna Nicole Smith. According to a CNN report last week, for the entire month of May, there were only 19 troop deaths in Iraq. (Last year, five people on average were shot every day in Chicago.) With Iraqi deaths at an all-time low, Iraq is safer than Detroit -- although the Middle Eastern food is still better in Detroit.
Al-Qaida is virtually destroyed, surprising even the CIA. Two weeks ago, The Washington Post reported: "Less than a year after his agency warned of new threats from a resurgent al-Qaida, CIA Director Michael V. Hayden now portrays the terrorist movement as essentially defeated in Iraq and Saudi Arabia and on the defensive throughout much of the rest of the world, including in its presumed haven along the Afghanistan-Pakistan border."
It's almost as if there's been some sort of "surge" going on, as strange as that sounds.
Just this week, The New York Times reported that al-Qaida and other terrorist groups in Southeast Asia have all but disappeared, starved of money and support. The U.S. and Australia have been working closely with the Philippines, Malaysia and Indonesia, sending them counterterrorism equipment and personnel.
But no one notices when 9/11 doesn't happen. Indeed, if we had somehow stopped the 9/11 attack, we'd all be watching Mohammed Atta being interviewed on MSNBC, explaining his lawsuit against the Bush administration. Maureen Dowd would be writing columns describing Khalid Sheik Mohammed as a "wannabe" terrorist being treated like Genghis Khan by an excitable Bush administration.
We begin to forget what it was like to turn on the TV, see a tornado, a car chase or another Pamela Anderson marriage and think: Good -- another day without a terrorist attack.
But liberals have only blind hatred for Bush -- and for those brute American interrogators who do not supply extra helpings of bearnaise sauce to the little darlings at Guantanamo with sufficient alacrity.
The sheer repetition of lies about Bush is wearing people down. There is not a liberal in this country worthy of kissing Bush's rear end, but the weakest members of the herd run from Bush. Compared to the lickspittles denying and attacking him, Bush is a moral giant -- if that's not damning with faint praise. John McCain should be so lucky as to be running for Bush's third term. Then he might have a chance.
Saturday, June 21, 2008
Oil Price Economics (Critique of Bill O'Reilly)
Bill O’Reilly of Fox News fame states in a recent article that energy independence is a national security issue. With that subject I agree, however, it is the predicate of his argument – namely, that big oil interests (e.g., petrol corporations and OPEC) are responsible for high gas prices – with which I take exception. O’Reilly’s role as a television news anchor notwithstanding, sensationalist rhetoric dodging the point at issue by Red Herring which points to the symptoms of the problem rather than the cause is naive at best and irresponsible at worst.
The US consumer is at fault here, not Iran or the mullahs, for high and rising oil prices. If household balance sheets were in order, our external debt position would not be where it is today. Moreover, if households collectively exercised prudence with regard to their political decisions surrounding the government budget (the other constituent part of our ‘twin deficits’), and specifically regarding our entitlements crises (e.g., Medicare and Social Security), by electing officials who would put an end to the abuse of unaccountable government spending facilitated via the laundering effect of statist welfare mechanisms or by simply voting away these monstrosities via referendum, our spending power, hence the price of goods such as oil, would be much different.
The rationale to back the premise that household profligacy leads to higher prices is thus: the market is more or less efficient in that investors, traders, merchants, and the like do not want to put themselves at more risk than necessary to make a living. Hence, there are limits to supply and demand, limits facilitated by the price mechanism.
(Disclaimer: If you wish to skip the wonkery, pass by this paragraph and you won’t lose any meaning behind my point.) The elasticity of demand for and supply of goods determines what degree supply and demand changes affect the [equilibrium, or market clearing] price. To be sure, the elasticity of demand for oil increases as the price rises as a percentage of household income. However, conjoined with other factors such as necessity and lack of proper substitutes, the relative inelasticity of demand for oil leads to consumption patterns which do harm to household balance sheets in the aggregate. Thus spending, investment, production, and employment growth in the economy is duly constrained. On the supply side, elasticity is affected by, among other things, the existence of raw materials (e.g., crude), production spare capacity (e.g., OPEC’s ability to put more petroleum onto the market), the length of the production process (e.g., refining Canadian tar sands) coupled with factor immobility and time (e.g., drilling and exploration).
American money is worth less than it used to be due to the monetary approach to the balance of payments whereby, according to Krugman and Obstfeld, “An increase in the supply of domestic currency bonds that the private sector must hold raises the risk premium on domestic currency assets,” (524, International Economics Theory and Policy). In other words, our trade deficit is financed, indirectly, via US government treasuries, among other securities. And the more financing activity we pursue (e.g., via household debt) the higher the risk premium we have tacked on to the price of our money. Therefore, purchasing power is directly linked to our spending activities – i.e., there is a causal link between debt and inflation.
The argument can also be made that the US is exporting inflation from wars in the Mid-East as financing overseas adventures puts a strain on government coffers. That oil prices are blowback of government overextension. Yes, that point is well received, however, government defense appropriations still do not make up nearly the proportion of the budget as entitlements (e.g., war = 20% while SS and Medicare = 60%). Moreover, estimates project that 2/3 of our economic growth has been consumption based. This suggests that the impact from government spending on war has had concomitant effects in the domestic economy (on the demand side), which have led to the impacts we now face in terms of our purchasing power [parity] reflected in higher prices.
The strength of the dollar, essentially, is determined by, among other things, our capital position (e.g., net assets or deficits) and future income earning potential coupled with past performance (e.g., market returns) and overall risk (e.g., default rates). When investors, traders, merchants, foreign sovereign wealth holders, etc. look at the US and its indefinitely increasing entitlements overhang (e.g., $42 Trillion Social Security and Medicare debt projected over the next 75 years) coupled with its increasingly stagnant economic growth (e.g., due to normal business cycle fluctuations), lending to decadent and irresponsible Americans looks less than appealing.
The meaning of our present condition lies much deeper than the vacuous notions propagated by populist demagogues of price manipulation for ‘windfall profits.’ The cost of oil is a proxy for a downgrade in [worldwide] investment opinions of the United States and these opinions reside in and are buttressed by rational economic expectations.
The US consumer is at fault here, not Iran or the mullahs, for high and rising oil prices. If household balance sheets were in order, our external debt position would not be where it is today. Moreover, if households collectively exercised prudence with regard to their political decisions surrounding the government budget (the other constituent part of our ‘twin deficits’), and specifically regarding our entitlements crises (e.g., Medicare and Social Security), by electing officials who would put an end to the abuse of unaccountable government spending facilitated via the laundering effect of statist welfare mechanisms or by simply voting away these monstrosities via referendum, our spending power, hence the price of goods such as oil, would be much different.
The rationale to back the premise that household profligacy leads to higher prices is thus: the market is more or less efficient in that investors, traders, merchants, and the like do not want to put themselves at more risk than necessary to make a living. Hence, there are limits to supply and demand, limits facilitated by the price mechanism.
(Disclaimer: If you wish to skip the wonkery, pass by this paragraph and you won’t lose any meaning behind my point.) The elasticity of demand for and supply of goods determines what degree supply and demand changes affect the [equilibrium, or market clearing] price. To be sure, the elasticity of demand for oil increases as the price rises as a percentage of household income. However, conjoined with other factors such as necessity and lack of proper substitutes, the relative inelasticity of demand for oil leads to consumption patterns which do harm to household balance sheets in the aggregate. Thus spending, investment, production, and employment growth in the economy is duly constrained. On the supply side, elasticity is affected by, among other things, the existence of raw materials (e.g., crude), production spare capacity (e.g., OPEC’s ability to put more petroleum onto the market), the length of the production process (e.g., refining Canadian tar sands) coupled with factor immobility and time (e.g., drilling and exploration).
American money is worth less than it used to be due to the monetary approach to the balance of payments whereby, according to Krugman and Obstfeld, “An increase in the supply of domestic currency bonds that the private sector must hold raises the risk premium on domestic currency assets,” (524, International Economics Theory and Policy). In other words, our trade deficit is financed, indirectly, via US government treasuries, among other securities. And the more financing activity we pursue (e.g., via household debt) the higher the risk premium we have tacked on to the price of our money. Therefore, purchasing power is directly linked to our spending activities – i.e., there is a causal link between debt and inflation.
The argument can also be made that the US is exporting inflation from wars in the Mid-East as financing overseas adventures puts a strain on government coffers. That oil prices are blowback of government overextension. Yes, that point is well received, however, government defense appropriations still do not make up nearly the proportion of the budget as entitlements (e.g., war = 20% while SS and Medicare = 60%). Moreover, estimates project that 2/3 of our economic growth has been consumption based. This suggests that the impact from government spending on war has had concomitant effects in the domestic economy (on the demand side), which have led to the impacts we now face in terms of our purchasing power [parity] reflected in higher prices.
The strength of the dollar, essentially, is determined by, among other things, our capital position (e.g., net assets or deficits) and future income earning potential coupled with past performance (e.g., market returns) and overall risk (e.g., default rates). When investors, traders, merchants, foreign sovereign wealth holders, etc. look at the US and its indefinitely increasing entitlements overhang (e.g., $42 Trillion Social Security and Medicare debt projected over the next 75 years) coupled with its increasingly stagnant economic growth (e.g., due to normal business cycle fluctuations), lending to decadent and irresponsible Americans looks less than appealing.
The meaning of our present condition lies much deeper than the vacuous notions propagated by populist demagogues of price manipulation for ‘windfall profits.’ The cost of oil is a proxy for a downgrade in [worldwide] investment opinions of the United States and these opinions reside in and are buttressed by rational economic expectations.
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