The important point that jumps out in this video exchange is that the fundamentals are there to support a steady increase in the price of oil. The world has not yet hit a price high enough to have enough of an impact on pressuring consumption. CNBC flashes a chart showing per capita oil consumption and the US numbers are not even close to anywhere else.
The Republicans and Bill Clinton made it easy for Detroit to promote gas guzzlers and energy conservation efforts were pushed to the side and labeled as kooky. The other interesting comment is when Boone Pickens - a billionaire oil trader and not a failed businessman like Bush - says "there are plenty of refineries around the world." This is from a Bush supporter and a very conservative Republican, contradicting what the GOP rolls out almost every day when giving their newest excuse for high oil prices. Bush is correct that there are no easy fixes for the problem, though blaming everyone else for problems the GOP created is just the usual "I didn't do it" spin that we've seen since the beginning.
Don't think the dollar's decline affects you since you don't go to Europe? Think Again. Chris posted earlier today about OPEC and the price of oil, and buried in his post was a fascinating quote from the head of OPEC:
"[E]ach time the dollar falls one percent, the price of the barrel rises by $4, and of course vice versa"
The dollar has fallen 30% versus the Euroe since April 2003. That would mean a $120 rise in the per barrel price of oil. Now, oil is at $120/barrel, and oil was around $30/barrel in 2003, so the formula isn't perfect. But that means the real increase was $90 versus the predicted $120. That's pretty darn close. The overall point is that the head of OPEC just said that George Bush and the Republicans' economic policy vis-a-vis destroying the dollar (they don't care if the value plummets because "it's the market's doing") has led to the majority of the oil price increase. I.e., you're paying more at the pump because of George Bush and the Republicans.
Predictable. Unless you are a Fortune 500 company and multi-multi-multi-millionaire, you can go Cheney yourself.
Some congressional Republicans also oppose Frank's proposal, saying it essentially forces one neighbor to pay for the mistakes of another.
"You're telling the guy who did it right that he has to help pay for the guy who did it wrong," said Rep. Jeb Hensarling, R-Texas. "When people are struggling to pay for their mortgages, they shouldn't be forced to pay for their neighbors' mortgage.
"I think about 95 percent of America is either renting a home, they own their home outright, or they're current on their mortgage," he said. "So 95 percent of America who's doing it right is asked to help bail out 5 percent of America who probably wasn't doing it right."
OK, so explain why bailing out the richest of the rich on Wall Street was acceptable? Where the hell are the Democrats on that bailout, dammit? The Wall Street bailout is one of the worst displays of cowardice since voting for war with Iraq and Iran. The bailout was weeks ago and besides a few entertaining moments of embarrassment for O'Neil, Prince and Mozilo, the Democrats have done nothing and said nothing about this disgusting corporate welfare. They are only too happy to hide in the corner on this issue but let the poor suffer on health care, unemployment, you name it.
Great energy policy by Bush and the GOP. Conservation was for liberals and not macho Republicans and now look what we have. Who ever could have seen this coming? Dick Cheney talked about the "resilient" US economy only a few months ago but like all of his bold predictions, it missed by a mile.
And we should believe him because...why? Recessions don't actually impact blue bloods like the Bush family so of course he has no idea how bad the situation is for everyone else.
President Bush urged Congress on Monday to resist efforts by Democrats to pass a second economic stimulus package, saying that while the economy is “in a rough time right now,” he is confident it will begin to rebound by the end of the year.
As much as Bush and Paulson will try and spin this as just another typical cycle when the economy turns south, they are still understating reality. They are attempting to spin this massive failure which Goldman forecasts as a $1.2 TRILLION loss as run of the mill and of cycle moment. The duo will tell us that they want to restructure the system a little, but by and large everything is fine. The lack of regulation did not just happen, it was planned and deployed this way courtesy of Wall Street and decades of lobbying Republicans in Congress. For them, it all worked out fine. They pocketed billions, probably trillions on the backs of both normal people. A few casualties, sure, but after all, Bear Chairman Cayne still pocketed a very cushy $61 million this week.
Another important issue that needs to be addressed is why should we believe Paulson and Bush when they talk about oversight? This administration has never shown interest in oversight or regulation unless there is a woman's nipple on TV. Obviously people have been calling for regulation of this wild west financial system for a while and they consistently ignored those calls. Even today, they want regulations to be mentioned, but not actually carried out because that might slow business down, so they say. Democrats have yet another opportunity to expose both the GOP and the administration on their weak response and failure to help out normal Americans. Will they seize the moment? We are in this situation because of specific GOP policy. Make them eat this dirt every day or expect the GOP to shed yet another of their failings and live another day.
It's not if, it's when. The only question left is how well we implement the bailout. Do we trust the people who led is into this abyss to do it properly? I sure as hell don't, but that's probably what we're going to get. In case I haven't mentioned it in the last ten minutes, McCain's economic team is central to the economic problems we are facing, so don't forget it.
As Bear goes, so will go the rest of the financial system. And if history is any guide, the coming taxpayer-financed bailout will end up costing a lot of money.
The U.S. savings and loan crisis of the 1980s ended up costing taxpayers 3.2 percent of G.D.P., the equivalent of $450 billion today. Some estimates put the fiscal cost of Japan’s post-bubble cleanup at more than 20 percent of G.D.P. — the equivalent of $3 trillion for the United States.
If these numbers shock you, they should. But the big bailout is coming. The only question is how well it will be managed.
The mismanagement of the US economy comes as no surprise to many. The Republicans ignored this for years and now suddenly we're supposed to jump and throw around billions of dollars that we don't have because of Iraq and excessive tax cuts. I may disagree with Congress wanting a bailout to every home buyer who was just as stupid and greedy as Wall Street but that's peanuts compared to the money we're sinking in to Wall Street.
Give the commissions, the big bonuses and the big salaries back and then let's talk about another government bailout. It's just too easy to bailout Wall Street without debate. Look at the debates in Congress when the GOP argues over a few bucks here and there but nowhere do I see them arguing a bailout of *their* damned problem. They own this rotting mess so every Democrat needs to pin it on the GOP every waking minute of the day. This goes well beyond Bush. It's the entire GOP.
"We're in the most serious economic problem we've been in in a very long time, much worse than 2001. The president's hands-off attitude is reminiscent of Herbert Hoover in 1929, in 1930," said Sen. Charles Schumer, D-N.Y. "There are lots of things that can be done, particularly on housing. Housing has been the bull's eye of this crisis."
House Speaker Nancy Pelosi, D-Calif., said, "Much of what the administration has done has been too late."
Just how much money do these freeloaders want from taxpayers? The previously pro free market crowd is now calling for bailouts, hand over fist, because we just can't have a domino effect. Sure. Great. Perhaps. But where was all of this concern when they were raking in billions in fluff? Everyone made their healthy commissions, bonuses flowed and lobbyist money kept the wheels of democracy running. Why are we now supposed to spring into action to bail out a system that they all wanted?
The worst of this bailout is that the US government is committing so many billions without even debating where the money goes or who is it helping. Are we now picking up the tab for Wall Street bonuses? Let Wall Street pay back the commissions and bonuses that were based on this trash and then let's talk. Their excuse is that they need to retain the good people who weren't part of the problems. Frankly, I don't care. The management made these problems and even today, we have Prince (Citibank), O'Neil (Merrill Lynch) and others who walked away with tens of millions all based on buying and selling trash. Let them pay it back and let's ask for all of the money that others made on selling trash and then let's talk. If they don't want to, fine, but don't ask for more money. Why are we giving bailout money without debate?
Make no mistake that we're in this situation because people like Bush and the McCain economic advisers wanted it this way. The problems are nowhere near the end and will continue to bleed but the Bush/GOP plan is to just throw money at the source of the problem. This is their plan for everything, throw cash and when your hands are empty, print more and throw that. Sheesh.
Why don't we "let the market decide" and watch the gamblers of Wall Street all collapse? Letting the market decide is what *they* wanted so why bail them out now? A dose of proper oversight could have limited the impact of the collapse and the run on the bank like at Bear Stearns and Lehman Brothers, but no, that's not what they wanted. Why print more money and give it away when the bums can't even admit they have a problem?
Now that the Fed has chopped interest rates (and will chop again, not that it's going to translate into lower rates for consumers) and they pumped $200 billion into Wall Street, I'd like to know where exactly the so-called free market/industry self-regulate people are. Where are they? They're all at the front of the bloody line calling for more handouts. When Democrats ask for money for SCHIP or food money for the poor or unemployment extensions, all we hear is about cost. What is the matter with Democrats? Is it so hard to scream and yell like the GOP? Why are they so silent on this bailout? Even the homeowner bailout is a pittance compared to the Wall Street bailout.
To show you what frauds the Republicans are, look at how we raised a $200 billion "loan" that uses the garbage subprime papers that nobody in their right mind wants anyway. Debate? Hell no. Just "poof" out of the blue sky, here's a bailout and a healthy loan to Wall Street, which won't be enough anyway. How is it that the "free market" crowd is suddenly nowhere to be found during this crisis? It's the McCain economic team that put all of this into place, so where is he now? Where's the outrage? And for the conspiracy theorists take note that the Spitzer story just happened to take the spotlight away from a very important event this week.
The banking system that is tumbling was designed and built together with the GOP. They can sit silent but they own this. McCain and his friends own this. This is what they wanted and there is no reason why US taxpayers ought to keep funding their mistakes. Shouldn't we treat Wall Street the way Wall Street and the GOP treat America's poor? Let them pick themselves up with their own bootstraps. Let them dig themselves out of the hole they dug form themselves. We can't afford a war plus a tanking economy plus a bailout for Wall Street. If that means the market will decided (as they always prefer) then so be it. Don't come crying and asking for cash now that the system they wanted is failing. Tough luck.
Well, putting aside the ridiculous lie that he was out in front of this problem, he seems to appreciate that we're in a mess.
Trying to calm jitters about the economy, President Bush conceded on Friday that the country "obviously is going through a tough time" but expressed confidence about a rebound.
I'm confident we will recover as well. It's going to be long after Bush is gone but sure, we will get through it as long as we wake up to the need to provide responsible regulation instead of ignoring crazy Wall Street ideas that lead to $200 billion bailouts. Just say "no" to Republican economics. We can't afford another GOP administration.
Shoppers not shopping because the credit binge is over. Families struggling to afford food and gas in the car to make it to work. Oil hits a new high every day thanks to a weak dollar. People worried about whether their job will still there by the end of the year. Isn't self-regulation worth it though? Business has been able to realize the decades long dream of letting us know if there's a problem and guess what? They say "no problem" so who are we to argue? Team McCain has already brought together the leading Bush economic adviser along with good ol' Phil Gramm, who helped build this new and exciting banking system that we all watch in awe (or is it shock?). McCain will eagerly bring us more of the same.
Oil hit a record high, the dollar sank again, and consumers stopped buying pretty much everything.
Stocks kept gyrating, too, on Thursday, swinging between gloomy recession evidence and rising hopes that all the bad news would bring another aggressive cut in interest rates when the Federal Reserve meets next week.
The Bush administration, conceding the economy was facing ''difficult'' times now, rushed out new proposals aimed at next time -- plans to fix various problems that have led to a severe crisis in credit markets.
Only the Republican knuckleheads could actually rush into action now that the situation they created is imploding and pulling down everyone. Uh, guys, this game ended a long time ago and all you could do was brag about the homeowner society.
The changes include tougher disclosure requirements for banks and Wall Street firms, a nationwide licensing system for mortgage brokers and new rules for credit rating agencies, which have been widely criticized for failing to recognize major problems with mortgage-backed securities and for having potential conflicts of interest.
“This effort is not about finding excuses or scapegoats,” said Treasury Secretary Henry M. Paulson Jr., who outlined the proposals in a speech here on Thursday morning. “But poor judgment and poor market practices led to mistakes by all participants.”
To hell with excuses like this, let Paulson, Bush and the GOP explain themselves. There were plenty of poor judgments through the entire GOP and that's the plain truth.
Unfortunately, unless you have lost tens of billions of dollars, you're pretty well screwed. See, if you are at the top of Wall Street and have your friends pay you over $460 million despite one of the most ridiculous business models in modern history (the dot com bomb has nothing on the real estate bubble), that's OK. For everyone else, this translates into personal debt, a weakening paycheck and another 63,000 jobs being chopped.
Let's ask McCain how the Bush economic adviser he hired will somehow do better this time. And then his economic brain Phil Gramm can tell us about the banking laws he engineered that brought us to this state. Go ahead and tell us how great it might be in the future with the same bogus system.
As long as you don't use oil. Or buy food. Or buy anything that has been produced outside of the US. If you do, then you will be feeling the new record high oil prices courtesy of incompetent Republican economic plans and pro-Wall Street policies by Bernanke at the Fed.
The next time Bernanke or anyone else says the weak dollar means nothing at home, think again. Besides contributing to the runaway gas prices, it also means that food staples are even cheaper than before for export markets. As the economies of India and China increase, they have more cash to buy cheap American corn, wheat, beef, etc and that means competition. Competition means higher prices. Add to that the inflated gas prices for corporate farming and transport and you have price increases at the grocery store not seen since the 1970s. The odds of McCain or Republicans disrupting the system they built stand somewhere between slim and nil.
Rising food prices can be particularly corrosive to consumer confidence because people are so frequently exposed to the cost increases. "It's the biggest risk we face economically, and it might be the thing that does us in," said Rich Yamarone, director of economic research at Argus Research Corp. in New York. "There's nothing really worse than having a job, making money, and forking most of it over just so you can have the same amount of food. You're running in place, and it really weighs on you."
Another day, another record low. How long before the GOP spins yet another terrible number as somehow unimportant?
Homeowners' portion of equity slipped to downwardly revised 49.6 percent in the second quarter of 2007, the central bank reported in its quarterly U.S. Flow of Funds Accounts, and declined further to 47.9 percent in the fourth quarter — the third straight quarter it was under 50 percent.
That marks the first time homeowners' debt on their houses exceeds their equity since the Fed started tracking the data in 1945.
The total value of equity also fell for the third straight quarter to $9.65 trillion from a downwardly revised $9.93 trillion in the third quarter.
Yes, the Republicans are experts with the economy. The pathetically weak dollar triggers a new record high for oil as it closes at $104.52. Can you imagine the "let market decide" people from a McCain administration? We seem to be hitting "new record highs" and "new record lows" but in all of the wrong places in recent months.
More economists are also seeing even more trouble ahead. Stephen Roach, Chairman of Morgan Stanley Asia has another interesting though critical read on where the Fed is taking our economy.
