The Politics of Bush Monetary Policies

[Neil Lisst]

Bush has allowed China and Japan to manipulate the values of their currencies against the US dollar, with hardly a word mumbled about it. They have both bought billions of US dollars to artificially make the US dollar stronger against their currencies. These actions make their products more affordable to US consumers, while making US products less affordable in their countries. This sends jobs from our country to theirs.

Our trade deficits have soared to record levels since Bush took over. Why? Because he has taken no action to stop the actions of Japan and China, actions that are nothing less than their governments subsidizing their products to gain advantage over American products.

Why would a president who likes to think he's tough do nothing? I'll tell you why.

They're his loan shark, his financier, the ones who make his deficit budgets palatable. Without their buying up dollars, he'd have to cover the shortfall with increased tax revenues, or more government debt instruments, which in turn would force interest rates higher.

Bush can't do anything about the monetary and trade abuses of China and Japan, because they're his loan shark. And who loses? Factory workers in the USA.

[Tace]

1. This From Henry Ford:

"It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."

[Neil Lisst]

2. Good quote. When did he say that?

I'd like to know the date to fix the economic circumstances at that time.

Adds perspective.

[teryang]

3. China and Japan are very different

Japan followed a protectionist model with Japanese corporations draining American reserves due to their superior economic competetiveness.

The transfer of American capital to China has been arranged by American corporations who ship productivity, profits and capital offshore deliberately to China to take advantage of lower resource and labor costs. China has been very receptive to this.

This development is one of decline and damage to American interests and welfare as a whole. However, the elite class of American corporate shareholders could care less. They are making money from it. This betrayal if you will of the national interest by its elites is typical of a late stage empire in decline. It's financial class abandons it first. They shuffle paper on the bourse while industry and production collapse in a sea of red ink. This is why the American economy is in desperate shape.

The average American knows that the economy is not doing well. The psychology on wall street however remains confident because of the huge gulf between the investor/financial class and working Americans. At some point the psychology will change when the consumer is unable to draw more credit to consume. Then the overdrawn financial markets will be unable to be saved by so called plunge protection efforts.

[Neil Lisst]

4. Your last paragraph should be mandatory reading.

The average American knows that the economy is not doing well.

Dead on.

When I see the bubbly buffoons of Business on Fox or CNBC clacking happily about the wonderous economy, I can hardly restrain myself. This period is much like the delusional spiral the primary markets took in the 1920s. They do not comprehend that what is good for Wall Street is not always good for the average American.

This country is in much worse economic condition than it was before Bush. Under Clinton, we were a country which was only buying what it could pay for. Under Bush, we're like the family that has used its ability to get credit in order to spend more than it makes, so it can support its lifestyle. But each year, the debt is higher, the debt service is higher, and more borrowing is the only way to cover the shortfall.

Our homeowners have just about exhausted their equities with refinancing loans, and interest rates will go up again before they go down again. It's a mess.