Some Thoughts on the Bush Economy

I just happened to turn on CNBC near the end of the trading session yesterday to get a quick look at the stock market and oil prices. Oil had jumped by about two dollars a barrel. That surprised me—$77 a barrrel is not a good price if you're worried about gasoline prices and your winter heating bill. I was about to turn off the TV when I noticed the Dow Jones was jumping around, mostly in a negative direction. Then it improved for about thirty seconds. I started to reach for the remote and suddenly the Dow Jones dropped ten points. Then ten more. In the next twenty minutes, the Dow Jones dropped by over a hundred points to close down over 200 points for the day. That's after a drop of more than 300 points the day before. I couldn't help whistling.

I'm no economist and even economists have a hard time understanding, let alone predicting, the vagaries of the stock market. This last week may have been nothing more than a correction and it may be that things will be fine for the rest of the summer. Or the Dow Jones is signaling turbulence. It might go back up only to have several corrections in the next few months. And then.... Well, who knows. Like I said, I'm not an economist.

But there are things that concern me. The thing that concerns me the most is my own ignorance. If something bothers me, I tend to go searching for an answer. Here's the problem: I don't know for sure what's sustaining the American economy at the moment. When I go looking for the answer, I can't seem to find it. I notice that we're importing a great number of goods and when I look for what it is we sell in return, I get uneasy. Our number one export for years has been technology, particulary, military technology. Our number two export, which is not that far behind technology, is the much maligned entertainment industry. But these two aren't enough to overcome the trade deficit. Nevertheless, we're told by some economists not to worry about it. But, in the other direction, one of the things we import in truly awesome numbers is energy. In a world of high demand and diminishing energy reserves, that is a pattern that cannot be sustained. And yet for the last five years, our economy has more or less muddled through. How is that possible?

Most conservatives (real conservatives, anyway) don't believe in deficit spending and after the excessive spending of the Vietnam era, they may actually have a point. For decades, though, many economists—and they're not just moderates and liberals but include some curious conservatives—argue that a certain degree of deficit spending by the federal government can stimulate the economy. That's probably true, as long as it doesn't lead to excessive inflation and high interest rates (though economist can argue forever about what is 'exccessive'). But I remember an argument that was made during the Reagan era that it almost didn't matter what the federal government spent its money on: it would stimulate the economy. I wish I could remember who it was but one economist was frequently quoted who said that if you spent billions of dollars on new weapons and dumped them all out in the middle of the ocean, it would still stimulate the economy. This argument was used to ally fears about the excessive defense spending of the Reagan era. Unfortunately, the argument probably has some degree of validty. But only some degree. A simple counter-argument (and there are many) is that if you built a hundred thousand units of low-income, affordable housing out in the middle of Nevada a hundred miles from any jobs, you will somewhat stimulate the economy but it will still be a waste of time and not necessarily a smart economic move. Build those hundred thousand units in various places across the country that are experiencing just a modest growth in jobs and you may be on to something.

The effect of Bush's fiasco in Iraq on our economy worries me. It's not clear what we are spending hundreds of billions of dollars for. It's not clear that we will ever reap any real benefit from Bush and Cheney's reckless incompetence. Now here's a story by James Glanz of The New York Times about Iraq reconstruction that appears to be an embodiment of that idea of dumping weapons in the middle of the ocean, though here the things being dumped are those odd Iraq reconstruction projects:

Iraq’s national government is refusing to take possession of thousands of American-financed reconstruction projects, forcing the United States either to hand them over to local Iraqis, who often lack the proper training and resources to keep the projects running, or commit new money to an effort that has already consumed billions of taxpayer dollars.

The conclusions, detailed in a report released Friday by the Special Inspector General for Iraq Reconstruction, a federal oversight agency, include the finding that of 2,797 completed projects costing $5.8 billion, Iraq’s national government had, by the spring of this year, accepted only 435 projects valued at $501 million. Few transfers to Iraqi national government control have taken place since the current Iraqi government, which is frequently criticized for inaction on matters relating to the American intervention, took office in 2006.

The United States often promotes the number of rebuilding projects, like power plants and hospitals, that have been completed in Iraq, citing them as signs of progress in a nation otherwise fraught with violence and political stalemate. But closer examination by the inspector general’s office, headed by Stuart W. Bowen Jr., has found that a number of individual projects are crumbling, abandoned or otherwise inoperative only months after the United States declared that they had been successfully completed. The United States always intended to hand over projects to the Iraqi government when they were completed.

Of course, as we have so often seen, what the Bush Administration says is happening does not seem to square with what is actually happening on the ground. If Bush lies about Iraq and lies about such important issues as Social Security, it might be reasonable to suppose that what his administration says about the economy is not always accurate (conservatives might argue that even Bush's corporate friends need accurate information (and to some extent I find myself affected by that argument) but we have repeatedly seen that politics always trumps good sense in the Bush Administration—ask former Treasury Secretary Paul O'Neil how much good sense is appreciated by Bush and Cheney).

I recently wrote about how the Bush Administration measure of core inflation does not include oil and food despite the fact that rising oil and food prices affect every American. Part of the problem is knowing what is being measured, what statistics are being used, how long those statistics have been used, what statistics were being used in the past so that we can make proper comparisons and.... Ach! Everybody hates statistics! And the Bush Administration knows it. But good honest statistics are vital for Americans to understand what's going on. I wish Paul Krugman or Brad DeLong would write about how statistics are being used by the Bush Administration and what measures that are still being published are worth looking at.

Supppsedly in the second quarter of this year the American economy grew; here's the AP story in Forbes:

The best barometer of the country's economic fitness - gross domestic product - increased at a 3.4 percent annual rate in the second quarter, the Commerce Department reported Friday.

Businesses regained their appetite to spend and sold more good overseas, contributing to the improved performance. Stronger government spending also helped out.

Hey, an increase of the GDP of 3.4 percent is not too bad! ....If it's a real number. Keep in mind that rising oil and food prices are not included. Subtract those rising prices, and the increase in the GDP, if it is an increase, will be much smaller.

In the same AP article in Forbes is this little item:

Businesses ramped up investment elsewhere.

They boosted their spending on new plants, buildings and other commercial construction at a whopping 22.1 percent rate, the most in 13 years. Investment on equipment and software posted a 2.3 percent growth rate, an improvement from a meager 0.3 percent growth rate in the first quarter.

Now I have two observations. First, investments in plants, equipment and software is generally a good thing. But it's worth mentioning a caveat. Because of Bush's tax cuts, many wealthy people, particularly in the energy sector, are flush with money right now. Sometimes money is used—instead of efficiency and new ideas—to push competitors out of business. I once lived near a high-quality horse training track. A very wealthy man moved in to the area but got bored. He built his own track with no other purpose than to put the first track out of business. Not much good came out of the enterprise. It was not good business; it was just a big ego. Conservatives will argue that's the price of capitalism but the reality is that we have had periods in our history when there can be too much of that kind of thing.

That leads to the second point. Notice that much of the spending included new buildings. I would like to know more about that. I once lived in Orange County, California. The economy there was free-wheeling for many years. During one period of very rapid housing construction, grocery stores were sometimes found on all four corners of a major intersection. It didn't last. Sooner or later, one, two or even three of the stores were driven out of business. In good middle-class neighborhoods, there were suddenly empty shopping centers. It was self-inflicted blight. I can remember many other examples, including huge buildings left over from the collapse of the space program in the early 1970s. So it's important to know if these new business buildings are being used. And are the old buildings being used? Or are we in another period like the one Dallas experienced in the 1980s when large office buildings were built and suddenly had no occupants after the S&L and oil bust. The most recent example of over-extension and over-building, besides its own crookedness, was Enron. Thanks to the generosity of Bush and his Republican friends in Congress, I have no doubt there are still Enrons out there.

David Gregory Campaigning for 8-Figure Salary

I've never been impressed with David Gregory's reporting which says something about the times because I consider him one of the better big name reporters of this era. It's a pathetic era for journalism and most of the finest journalism in the last five years has been by reporters who are considerably less well-paid than network darlings like David Gregory. In other words, the finest reporting has often been by people who are not big names (feel free to list in the comments section some of the better known reporters who manage to do a fine job). One of the ironies about David Gregory is that he is not well-liked by the right or well-liked by the left. Somehow that seems to make him, what?, an even-handed reporter?

But the reality of network and cable news is that nobody watches you unless you're controversial. Perhaps David Gregory figures his chances for a good eight figure salary will come if he utters ridiculous points on the news.

Think Progress has a David Gregory gem from the Chris Matthews show:

On the Chris Matthews Show this morning, NBC White House correspondent David Gregory said that Sen. Hillary Clinton (D-NY) will need to have “her ‘Sister Souljah’ moment” and distance herself from the “hatred over Iraq” on “the left.”

“The left” needs to “think about how they’re going to engage the war on terror in a very serious and tough way,” said Gregory.

(snip)

...68 percent of Americans support withdrawal from Iraq within a year.

David Gregory's stereotypes about those who oppose Bush's fiasco in Iraq don't help the debate. In fact, it makes Gregory look rather uninformed. President Bush has, in fact, united rational conservatives, moderates (real moderates not the network faux brand), liberals and even people to the left of this blogger (I'm a liberal Democrat who traces his beliefs to FDR, Truman and Kennedy). A majority of Americans are disgusted with the fiasco in Iraq and Bush's arrogant, incompetent and stubborn behavior. That's really not too difficult to understand, not even for a reporter.

So many Washington reporters and pundits have made gaffes in the last five years that I usually leave it to other bloggers to cover them. It's a fulltime job to keep up with the nonsense coming out of Washington that tries to pass itself off as 'conventional wisdom.'

Our nation, however, is in constitutional crisis, and David Gregory is either in denial or too busy working on that eight figure salary. And it's not Gregory's only offense in the last month.

Last month, Gregory interviewed Elizabeth Edwards and made some bizarre assertions as he interviewed her; here's the story from Americablog:

... According to NBC's David Gregory we're all missing the very important points that Ann Coulter makes because we get caught up in her hate speech. He just said to Elizabeth Edwards "if you strip away some of the inflammatory rhetoric against your husband and other Democrats, the point she's trying to make about your husband, Senator Edwards, running for the White House is in effect that he's disingenuous..."

Okay, so much wrong with the way Gregory defends Coulter. Her hateful, inflammatory rhetoric can't be stripped away -- and let's be honest, that's why NBC and ABC put her on their t.v. shows. In typical fashion, he also tries to paint everyone with the same kind of hate speech. So, instead of putting Coulter on, NBC now has one of their top reporters defending her approach. Because, you know, if you strip away the fact that Coulter advocated the assassination of a leading presidential candidate, and mocked his dead son, there's really such an important message buried inside.

Huh? Says so much.

Elizabeth Edwards handled it well, pretty much laughing at him -- and made the key point -- this is not about stripping away hateful rhetoric. The hate speech is the issue. ...

Both Think Progress and Americablog have video of David Gregory making his ridiculous assertions. Click on the links and they'll take you to the videos. Seeing and hearing is believing. It's just a shame that the process of pointing out poor news reporting may help Gregory reach that eight figure salary. But these are, of course, absurd times.

Economy and Energy Disconnect

The stock market keeps reaching for record territory despite signs that things are not great for most Americans. We had high oil prices last summer driven by fears, we're told, during the Lebanon crisis. After the crisis passed, and gasoline prices conveniently dropped in time for the 2002 mid-term elections, oil managed to reach a low of $51/barrel in January. However, since January, we've been hearing different stories, including refinery problems, as the price of oil has jumped 50%. Here's the latest on oil and gasoline prices in an AP story carried by the San Diego Union Tribune:

Gas prices fell more than a cent overnight, and gas and oil futures closed mixed on Thursday as investors tried to decipher a confusing picture of domestic gasoline production.

Oil briefly hit $76 a barrel for the first time in 11 months.

Gas futures stalled a day after they rose 9 cents a gallon on a surprise decline in inventories....

Last year and the year before, high energy and oil prices were very much in the news but now, most days, there seems to be less coverage of an energy problem that is clearly not getting better. Here's a New York Times article on a report that just came out and the bleak picture painted by the article may, in fact, be somewhat sugar-coated:

Because the world’s population is growing and living standards are rising worldwide, energy consumption globally is expected to rise by more than 50 percent over the next 25 years. But finding supplies to match that growth is going to be increasingly tough, and will require vast new investments in coming decades.

The council’s report warns of “accumulating risks” to energy production, including rising geopolitical barriers, inflation in costs, dwindling petroleum engineers, and growing constraints on carbon dioxide emissions. Although it does not say so explicitly, the subtext of the council’s study suggests that high energy prices might be here to stay.

The study’s release comes as frustrations grow over high energy costs and questions are raised over the security of the nation’s energy supplies. Congress is currently considering a new law to boost the development of alternative fuels and increase vehicle fuel efficiency.

My concern is that despite the warnings, the energy sector may be painting too rosy a picture of getting energy supplies. There is also talk of big energy projects that in reality may not be adequate to sustain the kind of living conditions we've come to enjoy in recent decades. And there's a bit of deception going on. "Energy production," for example, is not the same as oil production and definitely not the same as the production of light sweet crude. We're already in a different era and we have too many people in business and government who want to continue business as usual. Switching to coal with all its pollution problems won't be a step forward without some major changes that are not even on the drawing boards. We need a major program to make sure we really do have an energy future.

But we also need to recognize that we're developing an economy that is dangerously close to relegating most Americans as irrelevant. The stock market goes up and yet the lives of most Americans are becoming more difficult and their concerns are not heard by many in Washington, particularly in the White House, though it may be the Supreme Court that is becoming a long term problem with real consequences for the lives of ordinary Americans.

With food and energy prices rising, mainstream economists are still pleased that inflation is under control and only rising at modest levels. Of course, some measures of inflation no longer include food and energy. Here's an AP story in The Washington Post that includes a less rosy picture near the end:

Bernanke defended the Fed's use of core inflation rather than the overall inflation figure, which includes energy and food. He said the core figure was a better gauge of underlying inflation trends and more useful in forecasting.

Private economists, however, said that explanation probably would offer little comfort to people struggling to pay their gas and grocery bills.

"There is a growing gap between how the Fed and investors see inflation and how the average American feels about it," said Mark Zandi, chief economist at Moody's Economy.com.

Amen.

President Bush: The Blamer-in-Chief

There are exceptions, but one of the classic marks of a right-wing conservative is their tendency to blame everyone but themselves. Since the members of the Bush Administration keep trying to wear his mantle, it's worth noting that one of those exceptions was Winston Churchill who, though not quick to blame himself, still managed to accept responsibility for some of his blunders. Actually people with a record of successful decisions and actions can afford to accept responsibility and that may speak volumes about today's Republican Party: they have a well-financed and well-oiled noise machine but their record of accomplishments is not good. And none have accomplished so little as our president.

Dan Froomkin of White House Watch notes Bush's latest attempt to blame someone else for his particular fiasco in Iraq:

President Bush says that he should be trusted on military issues because he listens to his commanders. But he has a tendency to celebrate his generals when they're providing him political cover -- then stick a knife in their backs when they're no longer of any use to him.

Last week, Bush rejected any blame for the chaos that ensued in Iraq after the March 2003 invasion. So whose fault was it? Bush pointed the finger at Gen. Tommy Franks, the Central Command chief at the time. "My primary question to General Franks was, do you have what it takes to succeed? And do you have what it takes to succeed after you succeed in removing Saddam Hussein? And his answer was, yes," Bush said.

As we know, Bush does not listen. It is amazing how many untruths Bush can squeeze into his statements. So far, Bush has blamed any number of people for his fiasco in Iraq. He has blamed the Iraqis themselves, the Iranians, the Syrians, al Qaida and any number of others, including his fellow Americans. It's curious to note that President Bush has not blamed his partner in war, Dick Cheney. The vice president is, in some ways, more responsible for the fiasco than the president, but he gets a free pass from Bush. Others have noted Bush's reluctance to hold his vice president accountable, presumably, as the all too biting humor goes, because Cheney knows where all the bodies are buried.

We know the president is incompetent. We know he adheres to an ideology that blinds him to advice from experts who know what they're talking about. We know Bush cannot blame the generals for his fiasco in Katrina. We know Bush cannot blame the generals for the lack of an energy policy or the high gasoline prices. We know Bush cannot blame the generals for the reams of right-wing nonsense coming out of the various departments of the government as the president ignores science, the law and history. We know Bush cannot blame the generals for the outing of a CIA operative. The list of blunders and nonsense for which the president is responsible is long. Even in Iraq, Bush seems to have a conveniently compartmentalized memory of events. The generals did not insist on no-bid contracts. The generals did not send twenty-year-olds to set up stock markets. The generals didn't waste time on lucrative privatization schemes for Bush cronies. The generals did not come up with the preemptive strike princile. And it was not the generals who set up Paul Bremer as a viceroy. Blunder after blunder can be traced directly to decisions made by the Bush inner circle and there were no generals in that inner circle.

In my opinion, Bush is an authoritarian corporatist. He believes that business knows best—and deserves the most (certainly far more than was prevalent from the 1930s to the 1990s)—and I suspect he and his closest associates believe stockholders, business ethics and democracy are 'quaint.' But even Bush's business friends, cronies, campaign contributors and associates must all be astonished at just how grossly imcompetent the president has proven to be. It's a shame that Bush's real supporters, the same business class, fail to realize how much they themselves have lost their way and how much of Bush's failures stem from their own flawed ideological view of the world. I have no problem with competent people earning more than the rest of us but today's business world needs to explain how mediocrities like Bush keep acquiring so much wealth, power and authority to do the harm they do to our country.

Some Thoughts on Impeachment

One of the disturbing things about Bush's lawyers is the irritating habit they have of combing through history to look for precedents to justify the president's and vice president's actions. Of course, some of the precedents that Bush's lawyers use were made unlawful a long time ago and in other cases they have to do some fancy topological pretzel-twisting to make their precendents fit the current era, but that doesn't seem to stop them. And it's disturbing that there are so many people in the media that take the Bush Administration's convoluted arguments seriously. So everything I say about impeachment should be taken with a grain of salt. In fact, we are, as a nation, in very dangerous, uncharted territory.

We as a nation do not like to see our laws broken, even by very powerful politicians. In particular, we do not like to see anyone set themselves above the law. But the tools for holding the president and vice president accountable to the American people are damaged. Most of those tools ultimately require the cooperation of the Bush Administration in one way or another. In the past, there were enough officials with integrity to see to it that the law was observed to its fullest. When President Nixon tried to sabotage the investigation of his White House, there was enough integrity in the Justice Department and enough pressure from both parties in Congress to resist Nixon and to continue the investigations, but it was a near thing at the time.

There are other legal alternatives (see John Dean's latest article) that do not require relying on Bush's Justice Department but the means of accountability mentioned the most often in recent months is impeachment. But impeachment carries a bad taste these days because of its association with political motivations, Congressional grandstanding and even vengeance. We are in uncharted waters and there aren't many places to look for leadership on the issue of accountability. But there are some if one cares to look around and think about these things. Two who come to mind, at least in terms of discussing impeachment, democracy, and the law, are John Dean and Bill Moyers. Crooks and Liars has a video on a Moyers' discussion of impeachment; below the video is a quick summary that quickly gets to the issue that concerns so many of us:

In this clip PBS’ Bill Moyers sits down with The Nation’s John Nichols and conservative constitutional attorney Bruce Fein from the American Freedom Agenda to discuss the crimes and abuse of power by George Bush and Dick Cheney and the need to impeach them both. While Nichols and Fein come from different ends of the political spectrum, they are in total agreement on this issue. Congress must put impeachment on the table because if they do nothing to stop Bush and Cheney now, we will see future presidents follow in their footsteps which would be a disaster for our country.

Maybe our next president will undo much of the damage that Bush and Cheney have done. But in 2012 or 2016, if we allow the nonsense of the last six years to go unchallenged, we could elect a resentful Republican or an over-zealous Democrat who might dangerously take things further than Bush and Cheney. It's not an abstraction. These kind of things have happened in other countries.

I don't know if impeachment is going to happen or not. I don't even know if it's wise for the Democrats to pursue impeachment in terms of what may happen in November 2008—and that has to be a consideration because if Congress is returned to the Republicans without the Republicans reforming themselves, we can only expect more trouble. The Republican Noise machine is alive and well and an impeachment proceeding might be just the thing to rejuvenate sympathy for Bush, Cheney and the Republicans. On some serious abuses of the US Constitution and violations by the Bush Administration, the mainstream media has been irresponsibly slow to acknowledge what is happening and the media stars, in particular, have often done a poor job of informing themselves. Clearly, there are obstacles. But, if it's possible to do impeachment proceedings right, it would be the responsible thing to do.

Impeachment, however, would not be easy to pull off. It's up to the House to indict or impeach a government official and that requires a simple majority. To convict a government official (and thereby remove that official from office), however, would require two-thirds of the Senate. The Senate is where the key problem would be. Even if the Democrats can get all their members and two independents to go along with conviction, it's very difficult to imagine getting 17 Republicans to vote for conviction. These are not the Republicans of thirty years ago. Republicans in the Senate had six years to hold Bush and Cheney accountable when they had the majority but they refused to do so. It would have taken only a dozen or so joining the Democratic minority to hold the president and vice president accountable simply in terms of legislation and oversight; but a dozen responsible and courageous Republicans could not be found. Political courage, in fact, is not in abundance in either party these days.

I'm in sympathy with people pushing for impeachment and it's clear the momentum for impeachment, in fact, is going to have to come from the people. I know when she first became Speaker of the House that Nancy Pelosi said impeachment is not on the table, but we've been learning a lot since then. It heartens me that Senator Barbara Boxer said recently that impeachment, in fact, is on the table. That doesn't mean it will happen.

One thing to keep in mind is that the Bush Administration has had plenty of time in the last six years to cover its tracks. Even when Democrats knew something was going very wrong over at the White House, they didn't have the authority and the power to gather real information and real evidence with the subpoena and oversight powers needed to properly gather the needed material. The Republicans in Congress did everything they could to impede and obstruct investigations and oversight, both traditional and perfectly normal functions of Congress. Give a couple of criminals four or five years to cover up their crimes, as the Congressional Republicans appear to have done, and they just may get away with it, particularly if they have a rather large retinue of lawyers. And there's another issue involving the duties of Congress. Clearly, the Bush Administration has broken any number of specific laws, including those involving habeas corpus and domestic surveillance. But again, without the kind of Congressional hearings that can clearly explain to the public what the problem is and why these things matter, it is difficult to pursue these issues along lines of impeachment (and in the current environment, we can't necessarily expect much clarification from the media). If impeachment is to take place in the next six to eight months, there's a lot of ground to cover. The public, at long last, knows something is very wrong with the Bush Administration but articulating what is wrong is going to take some doing even at this late date. And just because the public is having difficulty trusting Bush and Cheney, that does not mean the public will trust those bringing impeachment proceeding against the president and vice president.

I've been browsing some discussions on impeachment that one can find on blogs. Keep in mind that I fully believe the president and vice president are liars, that they launched a campaign of deliberate deception and that they lied their way into a war in Iraq, a war we did not need, a war, in fact, that seems to have no particular purpose (at least one that Bush will admit) after four years of White House recklessness and incompetence. If the evidence can be found and presented, the campaign of deliberate deception is clearly the most impeachable offense. But there's the catch. I suspect finding concrete evidence of deliberate deception is not as easy as it sounds (the Nixon tapes, for example, were vitally important as far as evidence that the public could understand and accept). I have spent probably hundreds of hours poring over various materials and there's no question in my mind that the president and vice president actively deceived the American people. But there's very little that is concrete. No matter what issue is used to bring charges against Bush and Cheney, impeachment will require more concrete and understandable evidence that we have seen so far.

Dennis Kucinich has offered documentation for the impeachment of Cheney but much of the 'evidence' consists of press briefing transcripts. Impeachment will require much stronger material than that. Being wrong is not impeachable. Being incompetent is not impeachable. I worry that all Bush and Cheney need to do when it comes to the deceptive statements they made about Iraq is say that it's what they believed at the time, and that in 'their judgment,' what they said was reasonably true. Even Cheney's aggressive assertions of things he supposedly knew with certainty would require nothing more than a simple apology from Cheney to get him off the hook (one of the reasons the impeachment of Clinton was such a fiasco is that once Clinton apologized for his perjury, the impeachment proceeding had no real justification). Impeachment proceedings are going to require powerful evidence and very coherent arguments. And above all else, the proceeding have to be convincing to a majority of Americans. If impeachment is to succeed, there's a great deal of work to do.

I hope to say more on this in the coming weeks. My blogging time is limited these days but I think about these things all the time and there's a great deal more to discuss.

Caution: American Media Bored by Oil

As refineries finally catch up with demand, gasoline prices continue to drift down, but there has been little news about the rising price of oil over the last number of weeks. In January, oil fell to a low of $51/barrel but the price is now floating above $70/barrel and there are signs it may be awhile before it comes down again, assuming oil somewhat follows the pattern of the last two or three years. There's seemingly little coverage of this in the news. Perhaps the media is bored since Paris Hilton can't be tied to the oil story somehow. Of course, if hurricanes hit at any point in the next ten weeks, the price of oil will probably continue to soar.

Here's a story from the Financial Times worth noting:

A rule of thumb for the price of oil in the past five years has been to take the last digit of the year and add a zero: 2002 saw prices in the $20s; 2003 in the $30s; now oil is hovering around $70 a barrel. These high prices are desirable for steering the economy away from oil, but in the meantime they could also spell trouble. Oil companies need to adjust to this new reality and rethink their business model.

The latest report by the International Energy Agency warns of an oil supply crunch in five years. Demand is expected to rise at more than 2 per cent annually. Supply, the IEA calculates, will not be able to keep pace. Nations outside the Organisation of the Petroleum Exporting Countries are expected to add about 1 per cent to supplies per year. That puts most of the burden on Opec, in particular Saudi Arabia, which would face capacity constraints itself, the IEA says.

There's an active debate taking place in various locations around the world about when (not if) the oil crunch will occur, with some people arguing that the crunch has more or less already arrived. But the exact time the oil crunch will come is not the issue. The issue is that the time for making a reasonably painless transition to a world economy that can use other sources of energy in addition to diminishing supplies of oil has, in fact, been around for some three decades. The time to sell that big SUV and get something with better mileage is not five years from now, but today. Given the number of conservative-leaning contrarians in the United States, I suspect the transition to a new energy economy is unlikely to be painless.

Two Americas, Two Systems of Justice

George W. Bush just commutted Scooter Libby's sentence. There is one set of rules for powerful or wealthy Republicans and another set of rules for the rest of us. If Americans continue to put up with this, we lose our democracy and we lose our greatness.

President Bush is illegally using the government to increase the power of the Republican Party. He has started a war based on lies. He has broken treaties and laws. Bush and Cheney have flouted the US C0nstitution. Every Republican senator who continues to back George W. Bush is responsible for the disaster that is this presidency. Bush must be held accountable or precendence will be established for any number of undemocratic and authoritarian behavior by any future president regardless of whether they are Republican or Democrat.

Congress can restore order. Only a large number of obstructionist Republican senators are preventing the return to sanity. Democrats and and a handful of Republicans are making progress but Americans need to speak up loud and clear.