It

By
Saul Landau                                                                       Read Spanish Version

Traveling
through the country, I see the results of the economic downturn —
from urban Miami neighborhoods to poor rural areas like Collinsville
and Bird’s Landing north of San Francisco. In January alone,
California employers cut 20,300 jobs from their payrolls. I notice
more homeless people sleeping in the Oakland and San Francisco
streets, or jornaleros, (day workers) waiting in vain for work! But
for those who assume affluence as an axiom of life, such everyday
reality seems as strange as science fiction. 

Back
in 1992, the patrician President George H. W. Bush acted stunned when
he first saw a scanner read a code on an item at a grocers’
convention in Florida. By this time, the scanner and bar code had
become routine in stores throughout the country — for those who went
to stores to shop — not for the truly upper class.

The
son of high-born, President George W. Bush, looked equally surprised
in late February when a reporter informed him that gas prices might
rise over $4 a gallon. “Gee whiz,” said the expression on his
face. Wait for his tax rebate, he advised the public. These checks
amount to a few hundred dollars for people not in the lowest levels
of income and are scheduled to be mailed in May.

Bush
then ridiculed the idea that the U.S. economy had gone into
recession. Well, he hadn’t noticed any change in his lifestyle.
With his ubiquitous smirk, he declared: "I don’t think we’re
headed to a recession.” Then, sensing some disquiet in the room, he
added: “but no question we’re in a slowdown."

As
Bush reassured the public about the economy despite its downturn,
more a more knowledgeable analyst reported that the U.S. banking
sector is headed for a credit downturn that will be the “worst in
generations.” Duncan Mavin’s February 27 Vancouver Sun article
quoted Meredith Whitney, an analyst with Oppenheimer &Co. Inc.
and Fox News panelist. She predicted “widespread defaults on a
range of debts and a national housing price slide not seen since the
Great Depression.”

Whitney
pointed to massive “dramatic” loan losses by banks that “will
be the highest in the past 20-plus years as a result of greater
numbers of individual defaulting on mortgages and/or other loans and
from [loan balances that] are far higher than they were in the last
housing cycle."

Whitney,
who Forbes put as second on its list of top stock pickers for 2007,
predicted previously that the subprime loan problems facing Citigroup
Inc. would lead to a crisis. Indeed, a worldwide sell-off of banking
stocks ensued.

On
February 25, Whitney forecast that large U.S. banks’ earning in
2008 will drop by almost 30%. The reasons: mortgages, credit-card
balances and other risky loans.

The
Bushes haven’t had to deal with shopping for food or houses — nor
do their close friends. When they hear about housing prices dropping
six per cent across the United States in the last months, they shrug.
Whitney predicts “national home prices will decline by a factor of
three times such levels."

A
member of my family found it difficult to get a loan. The prospective
lender phoned his employers and checked and rechecked his credit
before deciding to allow him to get part of the loan he asked for.
This drying up of liquidity results from bankers becoming wary of the
once solid individuals and businesses that have defaulted in the last
year.

On
Friday, February 29, leap day in a leap year, stocks plunged over 315
points on the Dow Jones. Citigroup, the largest banking conglomerate
in the world, announced it would sell at least $100 billion of its
assets so that its stock price doesn’t fall more than expected.

Nobel
Prize winning economist Joseph Stiglitz claimed that Bush’s Iraq
war had drained trillions from the U.S. economy. Five years ago,
Bush’s neocon advisers had guaranteed the war would be quick and
cheap. In a February 23 London Times article, Stiglitz and Linda
Bilmes claim “we have a war that is costing more than anyone could
have imagined.” The cost of direct U.S. military operations —
excluding long-term costs such as taking care of wounded veterans —
already exceeds the cost of the 12-year war in Vietnam and is more
than double the cost of the Korean War.

Defense
Secretary Donald Rumsfeld and Deputy Defense Secretary Paul Wolfowitz
had assured Bush that “postwar reconstruction could pay for itself
through increased oil revenues.” Rumsfeld thought $50 to $60
billion would cover the costs and some of that would be paid by
allies.

Bush
has now requested $200 billion more in supplemental war funds for
2008. Stiglitz and Bilmes calculate that if this passes, “Congress
will have appropriated a total of over $845 billion for military
operations, reconstruction, embassy costs, enhanced security at U.S.
bases, and foreign aid programs in Iraq and Afghanistan.”

In
2008, projected war expenses will “exceed $12.5 billion a month for
Iraq alone, up from $4.4 billion in 2003, and with Afghanistan the
total is $16 billion a month,” an amount equal to the annual UN
budget.

These
figures do not include other military-related expenses, including the
maintenance of U.S. bases throughout the world, the costs for wounded
and dead (death benefits to families); nor does it cover
intelligence. Stiglitz and Bilmes, after reviewing the Pentagon
figures, arrive at costs for Iraq and Afghanistan of “more than $3
trillion. Our calculations are based on conservative assumptions.”

NBC
Reporter Ann Curry Ann Curry paraphrased Bush saying “you’re saying
you’re gonna have to carry that burden [of the Iraq War]. Some
Americans believe… they’re carrying the burden because of this
economy.”

Bush:
Yeah well-

Curry:
I mean they say they’re suffering because of this war, spending on
the war.

Bush:
I don’t think so. I think actually the spending in the war might
help with jobs…because we’re buying equipment, and people are
working.

Whereas
the old military Keynesianism before and after World War II
stimulated economic growth, Stiglitz explained, current military
budgets work in the opposite way. But not for the great economist in
the White House!

With
his ubiquitous shit-eating grin, Bush not only dismissed the
predictions of experts like Meredith Whitney and Stiglitz, but stood
firm if not stubbornly for continuing his war in Iraq. For that
reason alone, he endorsed John McCain, who boasts of his economic
ignorance and glories in the notion of perpetual war.

Like
the truly rich, the Bush family doesn’t see or feel material
suffering. They may read about such affairs, but never really come
into contact with it. When former First Lady Barbara Bush, W’s
mother, made a celebrity appearance visiting refugees from the
Katrina hurricane in a Houston arena, she said she was alarmed
because "they all want to stay in Texas. Everyone is so
overwhelmed by the hospitality. And so many of the people in the
arena here, you know, were underprivileged anyway, so this — this is
working very well for them." (Marketplace, American Public
Radio, September 7, 2005) Such statements of imperial arrogance
combine nicely with upper-class ignorance in her son, who has cost
the country and the world materially and spiritually.

Bush
has ruled by throwing hard balls of fear at Congress and the public
and then getting Congress to throw money — away — to pay for fear
remedies: ongoing war. In 1933, at his inaugural a different kind of
patrician, Franklin Roosevelt, eschewed fear-throwing and fostered
hope. By November 2008, voters may tire of catching Bush’s and
McCain’s fear-filled pitches and overcome, momentarily, lingering
racism or sexism and vote for a more prudent candidate. We’ll see!

Saul
Landau is an Institute for Policy Studies fellow and author of A
BUSH AND BOTOX WORLD
(forward by Gore Vidal). His new film, WE
DON’T PLAY GOLF HERE
is available on DVD through roundworldproductions@gmail.com.