The Political Junkies

archived: 17 - 23 Jun, 2007 Back Next

UPDATED: JUN 20, 2007

BUSH’S ECONOMY – “OTHER PEOPLES’ MONEY”

Bush’s economy is sagging:

The sluggish housing market is starting to drag down the rest of the economy, leading UCLA forecasters to conclude that although the U.S. is not actually in a recession, "it is certainly close."

The nation's economy grew by a sickly 0.6% in the first three months of the year, the smallest increase in four years and a sharp decline from the fourth quarter of 2006, according to the widely watched UCLA Anderson Forecast.

UCLA economists don't think economic growth will slip for a second straight quarter, which would signify a recession. But they predict that the economy will stay in a funk till next year as falling home values and rising gas prices put a crimp on consumer spending.

"We suspect that the weakness in the housing market is finally spilling over into consumption spending," wrote senior economist David Shulman in the quarterly forecast being released today. "Retail sales appeared to stall in April and automobile sales have become decidedly weak.

"This is not a recession, but it is certainly close," Shulman said.

The Anderson Forecast is closely watched because it predicted the 2001 recession before others.

Former Federal Reserve Chairman Paul Volcker states the looming economic problems succinctly:

[T]the 79-year-old New York economist who headed the Fed in the 1980s said there is a growing sense of uneasiness that the current prosperity is not sustainable.

The United States is importing 7 percent more goods than it exports, personal debt is soaring and the national debt while "not terribly large" compared with the total economy is mostly financed by investors in Japan, China and other countries.

"You can't expect this great country to live forever off other people's money," Volcker said.

Had enough?

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UPDATED: JUN 17, 2007

China is one of America’s principal “bankers.” China is largely financing our international trade deficit and financing our chronic Federal deficit. TPJ has published a rather large number of articles on the implications of America becoming so indebted to China and that “free trade” is not free at all. China unfairly manipulates its currency to tip the balance of trade in its favor; driving our trade deficit to record levels.

China is reaping huge profits from their trade with the United States. Where are those profits going? If the article below is to be believed, the profits are helping finance our opponents in Afghanistan and Iraq. The story:

New intelligence reveals China is covertly supplying large quantities of small arms and weapons to insurgents in Iraq and the Taliban militia in Afghanistan, through Iran.

U.S. government appeals to China to check some of the arms shipments in advance were met with stonewalling by Beijing, which insisted it knew nothing about the shipments and asked for additional intelligence on the transfers. The ploy has been used in the past by China to hide its arms-proliferation activities from the United States, according to U.S. officials with access to the intelligence reports.

Some arms were sent by aircraft directly from Chinese factories to Afghanistan and included large-caliber sniper rifles, millions of rounds of ammunition, rocket-propelled grenades and components for roadside bombs, as well as other small arms.

The Washington Times reported June 5 that Chinese-made HN-5 anti-aircraft missiles were being used by the Taliban.

According to the officials, the Iranians, in buying the arms, asked Chinese state-run suppliers to expedite the transfers and to remove serial numbers to prevent tracing their origin. China, for its part, offered to transport the weapons in order to prevent the weapons from being interdicted.

The weapons were described as "late-model" arms that have not been seen in the field before and were not left over from Saddam Hussein's rule in Iraq.

U.S. Army specialists suspect the weapons were transferred within the past three months.

The Bush administration has been trying to hide or downplay the intelligence reports to protect its pro-business policies toward China, and to continue to claim that China is helping the United States in the war on terrorism. U.S. officials have openly criticized Iran for the arms transfers but so far there has been no mention that China is a main supplier.

Defense Secretary Robert M. Gates said Wednesday that the flow of Iranian arms to Afghanistan is "fairly substantial" and that it is likely taking place with the help of the Iranian government.

Defense officials are upset that Chinese weapons are being used to kill Americans. "Americans are being killed by Chinese-supplied weapons, with the full knowledge and understanding of Beijing where these weapons are going," one official said.

The arms shipments show that the idea that China is helping the United States in the war on terrorism is "utter nonsense," the official said.

Fundamentally, China is profiting from trade and financing the Federal deficit and taking a portion of those profits to keep America’s enemies in the field. The war in Afghanistan and Bush’s occupation of Iraq increase the national debt that China is financing, at a profit (interest). That profit adds to the pool of money that China uses to further finance America’s enemies, ensuring that America’s military will have to stay in the field years into the future.

Meanwhile, America is no longer in a position to alienate its principal banker. TPJ readers will recall in TPJ’s THE BANKER that Secretary of Defense Gates expressly warned that:

cash-flush China was militarizing under an opaque budget and that Beijing's ballistic nuclear missiles could now strike the United States. . . .

"Americas financial sugar daddy" is China, because it has capital "for a nation that abhors savings, worships spending and is addicted to other peoples money.". . .

Reportedly, two-thirds of China's 1.2 trillion dollars in reserves are in dollar-denominated assets, including 420 billion in US Treasury bills. . . .

Washington is . . . concerned China is spending its mountain of foreign reserves on its military.

An annual Pentagon report on Friday said China could be "planning for pre-emptive military options in advance of regional crises."

US Defense Secretary Robert Gates said the report "paints a picture of a country that is devoting substantial resources to the military and developing ... some very sophisticated capabilities."

No sooner than Secretary Gates issued the warning than Secretary Gates started the apologies. In TPJ’s article SO SORRY we observed that the Chinese were obviously offended, and offending your Banker is never a wise move. Secretary of Defense Gates hit a:

conciliatory tone toward Beijing today, saying the United States and China have the opportunity to "build trust over time."

During a speech delivered form the same podium where Donald Rumsfeld said in 2005 that China's growing arsenal of ships, missiles and submarines threatened Asia's security balance, Gates steered away from a direct challenge to China about its military modernization and said he was hopeful about future dealings between the two countries.

"I believe there is reason to be optimistic about the U.S.-China relationship," Gates said, at a gathering here of defense ministers from the Pacific region.

Gates briefly raised concerns that China's actual defense spending appears to far outpace its publicly stated military budget. But the speech and comments by Pentagon officials make it clear that the Pentagon — which has long taken a hawkish view toward China's intentions — is hoping to lower the temperature in the relationship between the two powers. . . .

Last week, the Pentagon unveiled its annual report on Chinese military power that documented the People's Liberation Army's efforts to modernize its arsenal, which the U.S. fears could be used to strike U.S. bases and ships in the Pacific.

But Pentagon officials traveling with Gates said they did not intend to focus on the report here. Instead, defense officials said they wanted to focus on countering a growing perception that the U.S., engaged in wars in Iraq and Afghanistan, had neither the capability nor the desire to remain engaged in Asia.

With all of the false justifications for war in Iraq stripped away and Bush committed to an occupation in the midst of a country in civil war, the last Republican justification for the continued occupation is that if we do not engage the terrorists in Iraq, we will have to engage them here. Bush has proudly noted that the US has not been subject to a terrorist attack since the war started.

Perhaps there has not been a terrorist attack in the United States as our enemies have us where they want us; engaged in a civil war that cannot be won. China, our Banker, is simply acting from its national interests. They are financing our growing debt, at a profit, enriching them from American trade, while supplying our enemies to keep America at war; financially strapped and increasingly indebted to the Banker.

It is the ultimate retribution. And, the rest of the world is under no delusion:

China is on course to catch up with the United States and join the front ranks of world economic powers, but that is little cause for concern even among Americans, a global survey said Monday.

But the same poll showed there is generally as much distrust of the United States as there is of China to "act responsibly" in world affairs.

Most respondents in 13 countries agreed it was "likely that someday China's economy will grow to be as large as the US economy," according to the opinion poll by the Chicago Council on Global Affairs and WorldPublicOpinion.org.

"What is particularly striking is that despite the tectonic significance of China catching up with the US, overall the world public's response is low key -- almost philosophical," said Steven Kull, editor of WorldPublicOpinion.org.

In no country was there a majority who felt that China's economic rise would be mostly negative, but that was not because China is particularly trusted, the pollsters said.

Majorities in 10 out of 15 countries said they did not trust China "to act responsibly in the world." But the same number also said they distrusted the United States.

Bush and the Republicans promised Americans that domestic surveillance was a necessary consequence of 9/11. Their proposition was that such surveillance must be conducted outside of the judicial system and absent any meaningful Republican Congressional oversight when their Party controlled Congress.

An internal FBI audit has found that the bureau potentially violated the law or agency rules more than 1,000 times while collecting data about domestic phone calls, e-mails and financial transactions in recent years, far more than was documented in a Justice Department report in March that ignited bipartisan congressional criticism.

The new audit covers just 10 percent of the bureau's national security investigations since 2002, and so the mistakes in the FBI's domestic surveillance efforts probably number several thousand, bureau officials said in interviews. The earlier report found 22 violations in a much smaller sampling.

The vast majority of the new violations were instances in which telephone companies and Internet providers gave agents phone and e-mail records the agents did not request and were not authorized to collect. The agents retained the information anyway in their files, which mostly concerned suspected terrorist or espionage activities.

But two dozen of the newly-discovered violations involved agents' requests for information that U.S. law did not allow them to have, according to the audit results provided to The Washington Post. Only two such examples were identified earlier in the smaller sample.

FBI officials said the results confirmed what agency supervisors and outside critics feared, namely that many agents did not understand or follow the required legal procedures and paperwork requirements when collecting personal information with one of the most sensitive and powerful intelligence-gathering tools of the post-Sept. 11 era -- the National Security Letter, or NSL.

Such letters are uniformly secret and amount to nonnegotiable demands for personal information -- demands that are not reviewed in advance by a judge. After the 2001 terrorist attacks, Congress substantially eased the rules for issuing NSLs, requiring only that the bureau certify that the records are "sought for" or "relevant to" an investigation "to protect against international terrorism or clandestine intelligence activities."

The Republican Party is eroding 4^th Amendment protections at an alarming rate. Americans should never forget what our forefathers understood so well; there must be an effective system of checks and balances in order to protect EVERY citizen’s constitutional rights. Unlimited power in any branch of government invites abuse.

Tumble Weed (Bush) Watch